California home sales drop; prices plunge

LA JOLLA
June 18, 2008 1:46pm

Home prices in some places in California are starting to approach those in states like Minnesota, thanks to a statewide price crash of 30 percent, according to figures released Wednesday.

The state’s median price dropped in May to $339,000, down 4.2 percent from $354,000 for the month before, and down 30 percent from $484,000 for May a year ago when the median was at its peak, according to DataQuick Information Systems of La Jolla.

Around half the drop in median is due to depreciation, the other half due to shifts in the types of homes selling, and how those homes are financed.

Despite the plunging prices, buyers sat on their hands last month.

A total of 33,024 new and resale houses and condos were sold statewide last month, 6 percent from April but down 10.7 percent from 36,975 for May last year.

Last month's total made for the slowest May since 1995 when 32,223 homes sold.

Of the homes sold in May, 38.3 percent were foreclosure resales, up from 37.6 percent in April and 5.4 percent in May a year ago.

The typical mortgage payment that home buyers committed themselves to paying last month was $1,569. That was down from a revised $1,645 in April, and down from $2,266 for May a year ago.

Adjusted for inflation, mortgage payments are back to where they were in mid 2003, DataQuick says. They are 23.3 percent below the spring 1989 peak of the prior real estate cycle. They are 38 percent below the current cycle's peak in June 2006.

Indicators of market distress continue to move in different directions, says DataQuick. Foreclosure activity is at record levels while financing with adjustable-rate mortgages is at a six-year low. Down payment sizes and flipping rates are stable, non-owner occupied buying activity is increasing, DataQuick reported.

DataQuick is a subsidiary of Vancouver, B.C.-based MacDonald Dettwiler and Associates.