Schizophrenic Sales Data

Don't believe what you read! Just kidding. This is a great lesson about what is going on in our market today and why it is great that we live in such a special state. In today's CAR newsletter the following short stories were in the same article.

C.A.R. releases Sept. sales and price report
Home sales increased 2.1 percent in September in California compared with the same period a year ago, while the median price of an existing home declined 7.3 percent, C.A.R. reported yesterday.
The median price of an existing, single-family detached home in California during September 2009 was $296,090, a 7.3 percent decrease from the revised $319,310 median for September 2008, C.A.R. reported. The September 2009 median price rose 1.1 percent compared with August’s $292,960 median price.

“A new milestone was reached in September, when five C.A.R. regions reported positive year-to-year increases in the median price, the first such increase since January 2008,” said C.A.R. Vice President and Chief Economist Leslie-Appleton-Young. “September also marked the seventh consecutive month of month-to-month increases in the statewide median price and the first single-digit decline in the year-to-year median price since October 2007, after 22 consecutive months of double-digit decreases.”

Home prices decline 0.3 percent nationwide
Home prices decreased 0.3 percent nationwide on a seasonally adjusted basis from July to August, according to the Federal Housing Finance Agency’s (FHFA) monthly House Price Index. The FHFA’s index is calculated using purchase prices of houses owned or guaranteed by Fannie Mae or Freddie Mac. For the 12 months ending in August, U.S. home prices decreased 3.6 percent. The U.S. index is 10.7 percent below its April 2007 peak.

Makes you wonder how both can be true. The answer is simple. Real estate is a local phenomenon subject to many more factors beyond being a home and a price. Jobs, income bracket, community, age demographic, price point, financing, interest rates all play a part in the value of real estate.

The median price is up due to liquidity that was in the process ot tightening up last year. A year ago a loan over $700k simply didn't exist so selling a home in that price point was an extreme challenge. Now the laon market has stabilized and more buyers have the capaility to purchase a home. More recently inventory has dried up and banks have slowed the rate in foreclosures into the market. These two factors have created a mini boom in the lower price points and as more homes have sold in the 500k-800k range, the median goes up and prices overall fall. I won't even the high end freefall of prices but this is simply icing on the cake.

Yahoo News Link

Here is a quick news link from Yahoo on the state of the market.

http://finance.yahoo.com/news/Homes-About-to-get-much-cnnm-699910894.html?x=0