2009-01-22 12:41:02
By TERENCE CHEA, Associated Press Writer Terence Chea, Associated Press Writer Wed Jan 21, 8:38 pm ET
SAN FRANCISCO The median home price in California plummeted 38 percent in December from a year earlier as low-cost foreclosures boosted sales but lowered property values, a real estate tracking firm said Wednesday.
The median price for California houses and condos dropped to $249,000 last month from $402,000 in December 2007, according to San Diego-based MDA DataQuick. The median price is the point where half the homes sold for more and half sold for less.
The California median home price is at the lowest point since February 2002, when it was $245,000. It marks a 49-percent decline from the peak of $484,000 in the spring of 2007.
An estimated 37,836 homes were sold in California last month, up 18 percent from November and 48 percent from December 2007, according to DataQuick.
The housing market is being driven by bargain hunters snapping up bank-owned foreclosure properties, which accounted for 58 percent of existing homes sold last month, up from 24 percent a year earlier.
"The processing of these distressed properties is almost reaching a frenzied level," said John Karevoll, a DataQuick analyst. "Many of the banks just want to get these properties off their books. People are flocking to buy these foreclosure properties."
Richard Green, director of the University of Southern California's Lusk Center for Real Estate, said the California housing market is being hammered by tight credit markets, expectations of further price declines, a rapidly deteriorating economy and rising unemployment.
"Until the economy stabilizes, it will be hard to see the housing market stabilize," Green said. "If you see the unemployment rate turn around, that's when you'll start to see housing prices bottom and start turning in the other direction. Until that happens, I'm pretty gloomy."
DataQuick also reported Wednesday that the median home price in the nine-county San Francisco Bay area fell 44 percent, from $587,500 in December 2007 to $330,000 last month. That's the lowest since March 2000, when it was $320,500, and marks a 50-percent decline since the peak of $665,000 in the summer of 2007.
A total of 6,889 houses and condos were sold in the Bay Area in December, up 20 percent from November and up 36 percent from December 2007, according to DataQuick.
Most of the Bay Area sales took place in the East Bay counties hit hardest by foreclosures. The median home price fell 50 percent to $252,000 in Contra Costa County, 37 percent to $338,000 in Alameda County and 42 percent to $213,500 in Solano County. By contrast, it dropped 16 percent to $616,500 in San Francisco.
Sales of more expensive homes have stalled as would-be homebuyers run into trouble securing mortgages.
The upper half of the Bay Area housing market won't recover until the market for "jumbo" loans for more than $417,000 recovers, Karevoll said. Such loans used to account for more than 60 percent of the region's real estate financing, but only made up 22 percent of loans last month.
On Monday, DataQuick reported that the median home price in Southern California fell nearly 35 percent, from $425,000 in December 2007 to $278,000 last month, DataQuick said. The median price for the six-county region peaked at $505,000 in mid-2007.
There were 19,926 homes sold in Southern California last month, up 19 percent from November. Foreclosures accounted for 58 percent of December sales.
"It's very difficult, if not impossible, to predict what's going to happen," Karevoll said. "It's hard to project when the operating instructions for the market are no longer valid."