California Housing Data for August Comes as No Surprise

Home sales surge while prices plummet.

According to DQNews, 46.9 percent of homes sales in August 2008 were foreclosure resales; this is compared to 44.9 percent last month and a miniscule 9.4 percent in August of 2007. As one could expect with this type of data, home sales significantly suffered throughout California.

The Los Angeles Times reported that SoCal median home prices fell to $330,000; a 34% decline compared to last year, bringing values back to prices seen in November of 2003. The decline was even steeper for Los Angeles County where median home prices fell $20,000 from July to August.

The Bay Area’s Silicon Valley also posted declining numbers as Santa Clara County reported numbers not seen since September of 2004. The media price in Santa Clara County dipped below $600,000 to $592,750, compared to a median home price of $805,000 in August of 2007. The worst decline seen in the Bay Area belongs to Contra Costa County where median prices plummeted 48 percent from last year down to $315,000. DQNews estimates that 36 percent of Bay Area transactions were foreclosures last month, with Solano and Contra Costa County breaking the 50 percent mark.

One thing worth mentioning is that in areas like these where prices have plummeted, activity and transactions rose significantly. In Contra Costa County, the most statistically damaged county in the Bay Area, sales jumped 70 percent from last year’s levels in August 2007. But considering the data, these seemingly opposite numbers do go hand in hand. Bargain hunters love this market and as more foreclosure transactions are completed, the lower prices will continue.

Buyers were expected to save this housing market and we will just have to endure the cycle we are now facing. Until the inventory of discounted homes in California is less saturated, the more transactions we see, the further we can expect prices to drop. Bottom line, this is the price we will pay for the inflated and “bubbled” values until they return back to normal levels.