California Real Estate Market Update
FHA LOANS, INDUSTRY NEWS
June 11th, 2009
My last post highlighted some of the points made by California Association of Realtors executive Joel Singer at last week’s trade association conference. Besides sharing his thoughts on the cause of the financial and housing markets collapse, he gave some statistics that shed light on the current state of the California housing market:
- 82% of sales in California are for homes priced below $500,000
- At the height of the boom, buyers were buying homes priced up to 10x their annual income
- Units sold are up, but dollar volume is down 53% due to price contractions
- Unsold inventory averages 4.6 months for all price ranges
- Unsold inventory for homes over $1,000,000 - 17.2 month supply
- Unsold inventory for homes priced below $300,000 - 2.5 month supply
- Distress sales are lowest in Marin County- 1 in 3
- Distress sales are highest in Solano County- 4 out of 5
- 22% of homes sold today at a net loss
- 94% of home buyers are fluent with web and utilize internet for house hunting
- 9 out of 10 home sellers utilize the services of a real estate agent
Some other interesting points about where the housing market is headed:
- The soaring popularity of the FHA loan program will cause the program to go in the red next year-a first! The Mortgage Insurance Premium (MIP) has, to this point, offset any expense to the government (taxpayers!) to administer the insurance program. FHA loans were barely used during the bubble period 2003-2007.
- Second wave of foreclosures on horizon due to rising unemployment
- The market bottom is still forming for high end homes
Financially induced economic downturn has resulted in a rapid, unprecedented decline in housing prices statewide. In the past, when home prices rose rapidly in California, they were sticky coming down. The unparalleled breakdown in our financial systems has resulted in rapid price deflation.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
CORNER OF COURT AND PLACER IN REDDING
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
