California home prices down 42%

Source : Business Times - 29 Jan 2009

California home prices plunged 42 per cent in December from a year earlier as the US housing slump deepened and foreclosures hit record levels.

The median price for a single-family home in the most populous US state fell to US$281,100 from US$480,820 a year earlier, the California Association of Realtors said in a statement on Tuesday.

‘The decline in home prices has brought the cost of housing more in line with household income, improving affordability across the state,’ Leslie Appleton-Young, its chief economist, said. ‘This should be especially helpful for first-time buyers who can qualify for a home loan.’

More than 236,000 homes, or 2.8 per cent of California’s housing stock, were foreclosed on in 2008, MDA DataQuick said on Tuesday.

Foreclosed properties tend to sell at a discount of 25 per cent or more, and California home sales rose 85 per cent in response to last month’s drop in prices, the realtors’ association said.

The number of existing single-family detached homes sold jumped to 544,580 on an annualised basis from 294,520 a year earlier, the group said.

The median number of days it took to sell a property dropped to 46.1 days in December from 66.7 days a year earlier.

The Realtors’ Unsold Inventory Index, which indicates the number of months needed to deplete the supply of homes at the current sales rate, fell to 5.6 months from 13.4 months a year ago.

California mortgage defaults dropped 7.7 per cent in the fourth quarter after the state enacted a law to delay foreclosures, MDA DataQuick said in a separate report on Tuesday.

Homeowners in the state received 75,230 default notices in the fourth quarter, down from 81,550 a year earlier.

Fourth-quarter defaults were down 20 per cent from the previous three months, according to the research company.

A law that requires lenders to discuss ways to avoid foreclosure with California borrowers before filing a default notice went into effect in September. Defaults plunged to 14,995 that month, and were back up to 39,993 in December.