California Home Prices Increase in May for Third Straight Month; Largest May Increase in History
LOS ANGELES (June 25) – Home sales increased 35.2% in May in California compared with the same period a year ago, while the median price of an existing home declined 30.4%, the CALIFORNIA ASSOCIATION OF REALTORS (C.A.R.) reported (see chart above).“With affordability for first-time buyers at a record high, sales of existing, single-family homes continued to remain above the 500,000 level for the ninth consecutive month,” said C.A.R. President James Liptak. “Buyers are beginning to realize that the combination of favorable home prices, historically low mortgage rates, and first-time home buyer tax credits, may not align again for many years.
The median price of an existing, single-family detached home in California during May 2009 was $267,570, a 30.4% decrease from the revised $384,540 median for May 2008, C.A.R. reported. The May 2009 median price rose 4.2% compared with April’s $256,700 median price.
“The statewide median price rose for the third consecutive month in May, posting the largest monthly increase on record for the month of May, according to statistics dating back to 1979,” said C.A.R. Chief Economist Leslie Appleton-Young. “Nearly all regions in the state reported positive month-to-month changes in median price."
C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in May 2009 was 4.2 months, compared with 8.7 months for the same period a year ago (see chart above). The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.
WALL STREET JOURNAL -- California's median price for an existing single-family house rose for the third straight month, a sign that the state's battered real-estate market may be bottoming out.
California's real-estate market, the nation's largest, is seen as a barometer of the U.S. economy. Housing prices soared during the boom, and their plummet during the market's collapse resulted in massive foreclosures and fueled the recession. Economists say the state's housing market will lag behind the nation's in recovering, so any indication of improvement in California bodes well for the rest of the U.S.
MP: Unit sales increasing in CA + Median home prices increasing in CA + Median number of days to sell a home decreasing in CA + Unsold inventory index (4.2 months) falling to less than 50% compared to a year ago (8.7 months) in CA + Fewer foreclosed properties among those being sold in CA =
REAL ESTATE MARKET IN RECOVERY
2 Comments:
I live in L.A., and I sense the worst is over for house prices. Of course, in desert cities (Palmdale) houses are cheaper than they were in 1989. (Untold story--the poor in Los Angeles have been pushed inland).
The big question is can the current economic expansion be sustained? I sure hope so.
Ben Bernanke, please keep those printing presses on high for a few more years. When the plates are melting off the machines, when I can wallpaper my house with George Washingtons, when they are dancing naked in the streets--then cool things down.
No need to take away the punch bowl now---the party has not yet even started.
Benjamin,
I got way busy and never responded to your question from a few days ago as to when I think the recession ended.
Can I give you a day and time? No. I just review all the data, keep my eyes and ears open, and connect the dots to get a feel for when the tide is turning.
I'm not an expert, but I do keep an open mind which keeps me from always being cynical (like many of the posters here) or always being pollyannaish. For example, even though I've been positive on the economy for most of 2009, I was very pessimistic during a good portion of 2008.
What caused me to change my mind? The facts changed. Simply put, the global financial panic caused the global economy to slow down TOO much based on population growth and people needing to replace their worn out stuff. So we've reached a point where any further significant downside risk is minimal when compared to the upside potential.
If there were just a small number of things improving, I would be much more leery than I am. But when the positives are coming at me from so many angles, I'd have to be a true reality-denyer to be down on the economy right now.
Is everything wonderful? No...the administation scares the hell out of me, unemployment is high, and there are some issues overseas that have me a bit concerned. But we've had crappy administrations in the past, there's plenty of data that suggest the worst of the layoffs are behind us, and we've faced far worse geopolitical problems in the past.
Based on your question, "...can the current economic expansion be sustained?" it appears you agree the recession is over, too.
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