California home sales fall 13.3% in May
Sales of homes in California plunged 13.3% in May from the same month a year ago, when tax incentives were fueling the market, according to real estate research firm DataQuick of San Diego.
The lackluster sales market, which economists say is being held back by weak job growth, is contributing to anemic, if any, home price appreciation. The median price for a home was $249,000, down 10.4% from May 2010 and unchanged from April, DataQuick said.
Spring is typically a key season for the housing market, but that doesn’t appear to be the case this year, with markets sagging up and down the state.
“Sales got a big shot in the arm a year ago, when people rushed to take advantage of expiring homebuyer tax credits,” DataQuick President John Walsh said. “Today the market must stand on its own, and it’s having a hard time doing that in the absence of stronger job growth and consumer confidence.”
Many would-be move-up buyers owe more than what their properties are worth, essentially trapping them in their homes. UCLA forecasters expect coastal areas in the state to recover faster, with the high cost of gasoline prices driving people closer to job centers. But the move toward the coasts probably will boost construction through apartment growth in those regions, and not in places that need it the most: the Inland Empire and Central Valley.
Statewide, 35,536 new and previously owned houses and condominiums sold in May, a 0.9% decline from April and 24.1% below the average for that month dating to 1988, when DataQuick’s statistics begin.
The drop in the median price was the biggest year-over-year decrease since September 2009. The $249,000 median was 12.7% above the last bottom, hit just over two years ago during the throes of the financial crisis in April 2009.
Nationally, home prices have dropped below that April 2009 mark, according to the Standard & Poor’s Case-Shiller home price index.
So-called distressed properties made up more than half of the California resale market last month, with 35.5% of homes sold being foreclosures and 17.9% short sales, in which a bank allows a home to sell for less than the debt owed on a property.
Bay Area sales in May fell 15.4% from the same month a year ago, and the median sales price for that region hit $372,000, up 3.3% from April but down 9.3% from May 2010. In Southern California, sales fell 17.4% from May 2010 and the median hit $280,000, unchanged from the prior month and down 8.2% from the year-earlier period.
In other housing news, foreclosure data firm RealtyTrac Inc. reported that foreclosure filings in the U.S. declined 2% in May from April and plummeted 33% from May 2010. Many foreclosures appear to be on hold until regulators and major banks conclude settlement discussions stemming from faulty foreclosure practices that will probably change the way homes are repossessed in the U.S.
Separately, a gauge of U.S. homebuilder sentiment dropped to its lowest level since September 2010, the National Assn. of Homebuilders said. The NAHB/Wells Fargo Housing Market Index fell to 13 in June from 16 the prior month. Scaled from 1 to 100, readings above 50 indicate positive market views.