California home prices continue their freefall. This week, Standard and Poor’s released its monthly index of metro home prices, and California registers another record year-over-year drop. The composite average for San Francisco, Los Angeles and San Diego prices dropped in November by 28 percent from the previous year, the same as last month’s year-over-year drop – the largest ever recorded by the state, and exceeded only by the Sunbelt cities of Phoenix and Las Vegas.
According to this index, California’s composite home prices are equivalent to where they were in 2002 or 2003, depending on the region of the state.
Tumbling home prices continue to devastate the new housing market, which remains in historic doldrums.
The only bright spot in housing is a rally in home sales, especially the resale marketplace. Also driven by plummeting home values and a large inventory of existing homes (including a large pool of foreclosed homes), resales throughout California are on the rise.
According to MDA Dataquick:
An estimated 37,836 new and resale houses and condos were sold in California last month. That was up 17.6 percent from 32,163 in November and up 47.9 percent from 25,585 for December 2007. Sales have increased on a year-over-year basis for the last six months. (E.A.)
Of the existing homes sold last month, 57.5 percent were properties that had been foreclosed on. A year ago it was 23.7 percent.
Also according to Dataquick, the market is beginning to clear the low-cost inland foreclosures, while the more expensive markets remain in a wait-and-see mode as lenders continue to hold back on making “jumbo” home loans. This could be a leading indicator for recovery in the housing market in California.