California Home Prices Skyrocket To Highest Since 2008

Posted by Patrick Barnard on May 19, 2014 No Comments
Categories : Residential Mortgage

Although there is a continued month-over-month increase in sales, the long-term numbers for the month of April demonstrate that housing in California is becoming increasingly unaffordable for many, according to a report from DataQuick.

The California Association of Realtors recently elaborated on the state's current housing situation, stemming from a combination of continued price increases and relatively higher interest rates in the first quarter of this year.

DataQuick says, however, that an estimated 37,988 new and resale houses and condos sold statewide in April – up 15.4% from 32,923 in March, and down 2.7% from 39,051 sales in April 2013.

According to the report, the month-to-month sales gain was higher than usual: On average, sales have increased 2.9% between March and April since 1988, when DataQuick's statistics begin, but sales have fallen on a year-over-year basis for seven consecutive months. Last month's 2.7% dip from a year earlier was the smallest decline in that series.

April sales have varied from a low of 27,625 in 1995 to a high of 71,638 in 2004. Last month's sales were 13.1% below the average of 43,700 sales for all the months of April since 1988. California sales haven't been above average for any particular month in more than eight years, DataQuick reports.

The median price paid for a home in California last month was $383,000 – up 1.9% from $376,000 in March and up 18.2% from $324,000 in April 2013. It was the highest since January 2008, when the median was also $383,000. Last month was the 26th consecutive month in which the state's median sale price rose year over year. It was the first time in nearly a year and a half that the median's year-over-year gain was below 20%.

In March/April/May 2007, the median peaked at $484,000. The post-peak trough was $221,000 in April 2009.

Of the existing homes sold last month, 6.7% were properties that had been foreclosed on during the past year. That was down from a revised 7.2% in March and down from 13.5% a year earlier. Foreclosure resales peaked at 58.8% in February 2009.

Short sales made up an estimated 5.5% of the homes that resold last month. That was down from an estimated 7.0% the month before and down from 16.1% a year earlier.

The typical monthly mortgage payment that California buyers committed themselves to paying last month was $1,523, up from $1,496 the month before and up from $1,157 a year earlier. Adjusted for inflation, last month's payment was 34.8% below the typical payment in spring 1989 – the peak of the prior real estate cycle. It was 47.1% below the current cycle's peak in June 2006 and 63.6% above the January 2012 bottom of the current cycle.

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