California Mortgage Refinance
In October of 2009, California Association of Realtors® (CAR) President James Liptak said, "California’s housing market continued its strong sales rebound this year, resulting from the continued pace of distressed properties coming to market. This follows two years of double-digit sales declines in 2006 and 2007. Looking ahead, we expect sales to moderate to a more sustainable pace." His statement proved to be insightful.
Since the recession and national housing crisis began, the median price of homes in California has experienced its sharpest decline in history. According to experts like Liptak, the "new normal" for the California housing market will be sales of distressed properties and moderate home-price appreciation.
California Housing Market Recovery
A variety of converging factors affect the recovery in the California housing market. These include first-time buyers and investors buying low-end properties, resulting in short supply. High-end sellers are having a problem securing qualified buyers who can obtain financing with the more stringent loan requirements now in effect. California also ranks third in the nation for mortgage fraud, according to a report by Mortgage Asset Research Institute (MARI), a division of LexisNexis®. It remains to be seen how the lack of a tax credit stimulus for home buyers (it expired April 30th) will affect the California housing market.
CAR's 2010 California Housing Market Forecast estimated that distressed properties would account for nearly one-third of all sales in 2010. The experts at CAR predicted that the median price of housing in California would decrease slightly into 2010, leveling off during the summer. They believed that home prices will reach a high of $280,000.00 at some point in 2010.
Housing Market Rebound
As elsewhere in the nation (including Florida - the state hardest hit by the housing crisis), the California housing market rebounded in March of 2010. This rebound is largely attributed to the expiring tax credit for first-time and other homeowners, the start of the traditional spring buying season and bargain prices due to foreclosures and short sales.
In Las Vegas, home sales rose in March 2010 to the highest level in four years. According to MDA DataQuick of San Diego, foreclosure resales in Las Vegas fell to 55.5% in March 2010, as compared to 73.1 percent in March of 2009.
New Homes Sold Statistics
Throughout the state, approximately 37,295 condos, new and resale homes were sold in March of 2010. That represented a new home sales rise of 3.0% from 2009, and a rise of 32.7% from February 2010. The median price for homes sold in March 2010 was $255,000.00, which is an increase of 14.3% over the same month in 2009. At least 40% of homes resold in March were properties that were foreclosed on in 2008-2009. MDA DataQuick is a division of MDA Lending Solutions, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. MDA DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.
Overall, incremental improvement in the California housing market is creating cautious optimism for recovery. Wild cards that may or may not affect this forecast for the California housing market include a heavier than expected number of foreclosures flooding the market, loan resets, unemployment / job growth, actions taken by the U.S. government, and the budget crisis in California.
Per Aaron Smith of Dismal Scientist, Moody's Economy.com, "The increasingly strong recovery has led us to raise the first quarter growth forecast to 3.5%..." Moody's Economy.com, a division of Moody's Analytics, is a leading independent provider of economic analysis, data, and forecasting and credit risk services. As Mr. Smith noted in his column, "the recovery has legs, and downside risks are receding."