California Mortgage Highlights

Bay Area Home Sales Jump 45% while Median Prices Dive 36%. This brings the median home price in the Bay Area down to $400,000 compared to $625,000 in September 2007. Foreclosure resales accounted for much of the Bay Area home sales activity, ranging from a low of 9.5% in San Francisco to 67.9% in Solano County. The remaining counties fell between this range, with the average right around 37%. According to DQNews, the typical monthly mortgage for residents of the Bay Area fell to about $1890, down from $3171 from last year. In addition, mortgage activity showed that adjustable rate mortgages are near all time lows and multiple mortgages are down as well. [Full Report at DQNews]

Southern California Home Sales Jump  65% while Median Prices Dive 33.2%. Median home prices in Southern California neared $308,500, down from $462,000 in September of 2007. As for the foreclosure activity, Southern California had numbers showing numbers a consistently worse than those in Northern California. Foreclosure home sale activity ranged from 36.8% in Orange County to 68.9% in Riverside County. The remaining counties had an average of 48%, significantly higher than that in the Bay Area. In Southern California, typical homeowners had mortgages with monthly payments of about $1458, down from $2198 last year. They also shared the same trend as the Bay Area with ARM financing and multiple mortgages decreasing. [Full Report at DQNews]

Interpreting the Data
The trends and data that have been presented clearly show the onslaught of foreclosures continuing in California’s housing market. Bargain hunters are definitely responsible for most of these home sales transactions as sales numbers rise while prices continue to dive.  One thing that September 2008 data shows us is the reminder of the significant lack of activity in September of 2007. The numbers we see are definitely convincing of the bargain shopping going around in California, but one can’t forget the terrible times of September 2007. Home sales activity and mortgage activity became stagnant in California as the credit crisis began emerging and everyone sat around during that period. 

What we are seeing unfold before our eyes is the correction of home prices throughout California. Until enough of these bargain hunters can snatch up more of these discount homes, we still have quite a large inventory of homes sitting in our hands. The balance point will be struck when home sales and median prices adjust accordingly; meaning no jumps in one and dives in the other. Eventually, we’ll be hoping for sales activity to rise, with median prices holding steady and possibly increasing as well. As for now, I guess we should be thankful that at least home sales are up, despite the continuing drop in home prices.  Next month’s data will also be interesting as this last month brought us a series of economic woes and breaking headlines; a definite factor when considering the average home buyers mindset and considerations.

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