The median price of an existing, single-family home in California rose for the seventh consecutive month in September to $296,090, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ most-recent sales and price report. Home sales also increased in September, rising 2.1 percent compared with August. If home sales maintain their current pace, 530,520 units will be sold in California in 2009.

KEEP THIS IN MIND
• The market’s momentum continued in September, as many home buyers took advantage of the federal tax credit for first-time home buyers. The success of the federal tax credit is clear. Nearly 70 percent of first-time home buyers report that the tax credit was ‘the most important’ or a ‘very important’ factor in their decision to buy a home.
• C.A.R. is calling for the U.S. Senate to swiftly adopt the Dodd-Lieberman-Isakson amendment, which would extend the federal tax credit through June 30, 2010, remove the first-time buyer requirement and extend the credit to all home buyers, and increase the qualifying income limits so more families are eligible for the credit.
• A new milestone was reached in September, when five C.A.R. regions reported positive year- to-year increases in the median price, the first such increase since January 2008. September also marked the first single-digit decline in the year-to-year median price since October 2007, after 22 consecutive months of double-digit decreases, leading many to believe the state’s median prices are leveling out.
• C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in September 2009 was 4.2 months, compared with 6.5 months for the same period a year ago. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.
• Thirty-year fixed-mortgage interest rates averaged 5.06 percent during September 2009, compared with 6.04 percent in September 2008, according to Freddie Mac. Adjustable- mortgage interest rates averaged 4.59 percent in September 2009, compared with 5.14 percent in September 2008.

But that decline in value is becoming less steep. In fact, over the past few months in several San Gabriel Valley cities, prices are up compared with last year.

In Monrovia, for instance, the median price of a single family home stood at $458,000 – a 3.5 percent increase from last year’s $442,450 median.

A home in Pasadena jumped from $510,000 in September 2008 to $514,250 last month.

Even with the jumps, affordability levels remain high, and that’s driving the market, said John Husing, an economist who specializes in the Inland Empire.
“I believe the bottom of the housing downturn is now behind us,” Husing said. “We bottomed in the second quarter.”

Still, there doesn’t look to be a smooth recovery.

The market is “bouncing along the bottom,” Husing said.

In Baldwin Park, the past three months have been spotty.

In September – and in contrast to many other local cities – the city actually saw its home values dip even further, down 18.8 percent to $235,000.

It was unclear why the median prices in Baldwin Park have been so up and down.

While it’s easy to blame unemployment, experts cautioned against putting too much stock in lack of jobs.

Development patterns and available housing stock also play a role, they said.

What was clear to CAR officials was that in order to continue fueling demand for homes, Congress needed to extend the first-time homebuyer credit. That came as early as this week, Goddard said.

“There’s an awful lot of people who really need that $8,000,” Goddard said. “For some, that going to be half of their down payment.”

Filed under: Economy, Money-Saving, Mortgage, Real Estate Market, Tax Issues, VRN