Are you surprised?
The California Association of Realtors December 16, 2008, release of its C.A.R.'s "State of the California Housing Market 2008-2009" talks about declining home values, increased sales, and credit crunch impacted California's housing market in 2008.
Here's what I see for points of interest:
1. Approximately one in five home sales in California during 2008 resulted from foreclosure, short sale, or default.
2. Sales generally improved over 2007 in all parts of California, with major price declines leading to sharp increases in the Central Valley and Southern California.
3. Almost one of five (19.8 percent) sellers sold their property because the property was in foreclosure, short sales, or default, an increase of 6 percent from 2007."
4. The median price of existing homes, including single-family homes, condos, and townhomes, declined by 17.8 percent to $440,000 in 2008 as compared with $535,000 in 2007.
5. Home Affordability increased dramatically in 2008 resulting from the decline in median home prices. C.A.R.'s First-Time Buyer Housing Affordability Index (FTB-HAI) rose to 53 percent during the third quarter. The FTB-HAI measures the percentage of households that can afford to purchase an entry-level home in California.
6. The share of first-time buyers increased from 30.4 percent in 2007 to 35.9 percent in 2008. (below the long term average of 38.3 percent).
7. Restrictive loan underwriting standards led to a decrease in the use of second mortgages during 2008.
8. As conventional loans became more difficult to get, the percentage of FHA loans as a first mortgage increased significantly in 2008. Why? the US Economic Stimulus Act of 2008 temporarily raised the conforming loan limit in high-cost areas to $729,750 from $417,000 until December 31, 2008.
9. We experienced the subprime mortgage meltdown, and share of adjustable rate and hybrid loans among all new first mortgages decreased again.
10. More than half of the distressed properties sold in California were Real Estate Owned (REO) (54.8 percent), almost one-third were short sales (31.2 percent) and the remainder were foreclosures (14.1 percent).
Are you surprised by this news? That's what I see from summary of the CAR Annual Housing Report 2008.
Harrison K. Long, Explore Group properties, Coldwell Banker Previews, Irvine, CA.
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