California is leading America’s real estate market out of its worst depression since the 1930s.
The volume of home sales there have been up year-over-year for 13 months, according to DQNews.com. Sales in July hit the highest level of any month since August 2006. Median prices have risen for the past three months.
The rebound isn’t complete yet. Sales are still concentrated at the lower end of the market, especially foreclosed homes. Medium- and high-priced home sales still lag.
Nevertheless, inventories of lower-priced homes in California are so low that there are reports of multiple bids and even first-time buyers (who qualify for an $8,000 federal tax credit) getting outbid by all-cash buyers, says Walter Molony, spokesman for the National Association of Realtors (NAR). “We’re in a seller’s market.”
In July, there were only two months of inventory of homes selling for $100,000 and under in the West, according to the NAR. The national average was 5.2 months. (Six to seven months would represent a market in balance.)
The inventory of homes selling for $100,000 to $200,000 in the West was also a low 3.1 months (US average 7.2 months). The West’s inventory of $250,000 to $500,000 homes was 5.2 months (US average 8.6).
“It is hopping,” says Gary Giffin, a real estate agent in San Diego. “If it’s a foreclosure, it’s moving in under seven days.”
California is ahead of the real estate curve because it has witnessed some of the biggest price declines and some of the most housing stress. California and three other states account for more than half of America’s foreclosures.
Having worked through much of that difficulty the market is stabilizing and trending up.
Update: 9/1 “We’re either skipping or bouncing along the bottom of this market and we’re seeing some nice direction,” says Steve Goddard, president-elect of the California Association of Realtors and a real estate broker/manager in Manhattan Beach, Calif.
Foreclosed homes are attracting so much attention in the Golden State – an average five to seven offers – and selling above list price that brokers are urging banks to put more of their foreclosures on the market. Last month, the California Association of Realtors met with representatives of Fannie Mae, asking them to speed up the process to put foreclosures up for sale. “They promised us” action would be taken, Mr. Goddard says in an interview.