The national headlines regarding the housing market this week sounded rather distressful. For example: “Home sales plunge again as buyers remain hesitant” – AP 2/25/09, and “Home prices tumble 18.5% to another new low” Reuters 2/24/09. In these articles, it was stated that sales fell 5.3% from December 2008 to January 2009 to the lowest levels in 12 years. In addition, the level of inventory of homes on the market was at 9.6 months. In other words, it would take 9.6 months of sales at the current sales rate to sell every home on the market. It was also mentioned that home prices have dropped 26.7% from the peak of the housing market in the second quarter of 2006 to current.
These headlines may grab attention, but they are nearly meaningless when it comes to your local housing market. As we’ve discussed in previous blogs, the national housing market is made up of innumerable small localized markets. That said, let’s take a look at what has happened in the California housing market.
· Existing, single-family home sales increased 100.8 percent in January 2009 versus January 2008. Sales increased 14 percent in January 2009 versus December 2008.
· The statewide median price of an existing single-family home decreased 40.5 percent in January 2009 to $254,350, versus January 2008 of $424,200.
· C.A.R.’s Unsold Inventory Index was 6.7 months in January 2009, compared with 16.6 months in January 2008. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.
“Statewide sales in January edged past the 600,000 threshold for the first time since October 2005,” said C.A.R. President James Liptak.
In the California market, we have seen a greater reduction in prices which has created a significant response by the buyers, as evidenced by the marked increase in sales. While the “national housing market” peaked in the second quarter of 2006 according to the Standard & Poor's/Case-Shiller home price index, our market peaked in the second quarter of 2005. Traditionally, California has led the nation into and out of a number of economic cycles. It appears that California led the housing market down. Now perhaps, it is leading the housing market back up.
In the midst of the national press, remember to keep focused on the specific housing market that YOU are interested in. Things change rapidly, and the significance of the increasing sales in the California housing market is currently “under the radar.” If you would like information on what is happening in the Palm Springs market, including Palm Desert, Rancho Mirage, Indian Wells, La Quinta and Indio, please contact us.
If you have any questions or comments, please respond to this blog, email us at SandL@StefaniRealty.com or visit our website www.StefaniRealty.com for telephone contact information. We would be happy to help you find the home of your choice, or discuss with you the value of your home and our marketing strategies.