Jim Guido's Blog

California home sales and median price are predicted to improve only slightly in 2012, as the continuation of the tepid economic recovery, uncertainty about the future, and funding challenges for residential mortgages are expected to keep the market moving sideways, with little foreseeable momentum in either direction, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) “2012 California Housing Market Forecast”.

The forecast for California home sales next year is for a slight 1 percent increase to 496,200 units, following essentially flat sales of 491,100 homes this year compared to the 491,500 homes sold in 2010.

Despite the run of unforeseen global events in the first half of this year that slowed the overall economy, 2011 home sales are projected to essentially remain unchanged from last year. Looking ahead, the fundamentals of the housing market – such as low mortgage rates, high housing affordability, and favorable home prices – are expected to continue, but at this point, a strong housing recovery will depend on consumer confidence, job creation, and the availability and cost of home loans.

Discretionary sellers will play a larger role in next year’s housing market and those who held off selling in 2011 may list their homes in 2012, thereby improving the mix of homes for sale compared with the last few years.  Additionally, distressed sales will remain an important segment of the overall market as lenders continue to work through the foreclosure process.

The California median home price will increase 1.7 percent in 2012 to $296,000 in 2012, according to the forecast.  Following a double-digit increase in the median price in 2010, the median home price will decrease a projected 4 percent in 2011 to $291,000.

2012 will be another transition year for the California housing market, as the continued uncertainty about the U.S. financial system, job growth, and the stability of the overall economy remain in the forefront for all market participants,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young.  “An improvement in job growth, consumer spending, and corresponding gains in housing are essential to a broader recovery in the economy, but would-be buyers will remain cautious as they weigh these myriad uncertainties against the clear opportunities presented by today’s very affordable housing market.

“The most likely scenario is for the modest recovery to continue, and this should push sales up slightly next year by 1 percent and maintain levels that are significantly higher than those recorded during the depths of the housing downturn.

“The wild cards for 2012 are many, including federal, fiscal, monetary, and housing policies; the contentious political climate during an election year; and the strength of the U.S. economic recovery,” said Appleton-Young.

The CALIFORNIA ASSOCIATION OF REALTORS® is reporting that  California’s  home sales posted an increase from both the previous month and previous year in August and that the median home price rose to its highest level this year.

Closed escrow sales of existing, single-family detached homes in California rose to a seasonally adjusted 497,390 units in August, up 8.6 percent from a revised 457,930 in July, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide.  August home sales were up 10.2 percent from the revised 451,520 units sold during the like period a year ago.  The statewide sales figure represents what would be the total number of homes sold during 2011 if sales maintained the August pace throughout the year.  It is adjusted to account for seasonal factors that typically influence home sales.

The report further states that August’s median price marked the highest since December 2010, signifying that prices may be stabilizing in some market segments, as investors and first-time buyers continue to see value and opportunity in the market.

The August statewide median price of an existing, single-family detached home sold in California was $297,060, up 1 percent from a revised $294,050 in July, but down 7.4 percent from the $320,860 median price recorded for August 2010.

Other aspects of C.A.R.’s resale housing report for August 2011 include:

• The Unsold Inventory Index for existing, single-family detached homes was 5 months in August, down from 5.5 months in July and down from a revised 5.8 months in August 2010.  The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.
• Thirty-year fixed-mortgage interest rates averaged 4.27 percent during August 2011, down from 4.43 percent in August 2010, according to Freddie Mac.  Adjustable-mortgage interest rates averaged 2.93 percent in July 2011, compared with 3.53 percent in August 2010.
• The median number of days it took to sell a single-family home was 52.7 days in August 2011, compared with 45.5 days for the same period a year ago.

San Jose, 95125 Summary

The median sales price for homes in ZIP code 95125 for May 11 to Jul 11 was $630,000. This represents an increase of 1.1%, or $7,000, compared to the prior quarter and a decrease of 3.4% compared to the prior year. Sales prices have depreciated 17.6% over the last 5 years in 95125, San Jose. The median sales price of $630,000 for 95125 is 57.50% higher than the median sales price for San Jose CA. Average listing price for homes on Trulia in ZIP code 95125 was $768,979 for the week ending Aug 24, which represents a decline of 1%, or $7,894 compared to the prior week and a decline of 0.3%, or $2,384, compared to the week ending Aug 03. Average price per square foot for homes in 95125 was $390 in the most recent quarter, which is 34.95% higher than the average price per square foot for homes in San Jose.

95125, San Jose Recently Sold Homes

95125, San Jose Homes For Sale

California home sales fell in July but were up from the previous year, as reported today by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R).

The report states that closed escrow sales of existing, single-family detached homes in California dropped 4.1 percent to a seasonally adjusted 458,440 units in July which was gathered from more than 90 local REALTOR® associations and MLSs statewide.  July home sales were up 4.5 percent from the 438,850 units sold in July 2010.  The statewide sales figure represents what would be the total number of homes sold during 2011 if sales maintained the July pace throughout the year. Adjustments are made to account for seasonal factors that typically influence home sales.

Even though July sales improved over last year, they were somewhat weaker than expected, given current prices and mortgage rates.  Their is Economic uncertainty and recent developments in financial markets have caused hesitation among buyers. We must see sustained job and income gains along with an increase in consumer confidence before we can expect to see consistent improvement in the housing market.

The statewide median price of an existing, single-family detached home sold in California dipped 0.3 percent in July to $294,230 from a revised $295,210 in June.  July’s median price was down 7.6 percent from the $318,550 recorded in July 2010.

Other aspects of C.A.R.’s resale housing report for July 2011 include:

• The Unsold Inventory Index for existing, single-family detached homes was 5.5 months in July, up from 5.0 months in June, but essentially unchanged from July 2010’s 5.6-month supply. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.
• Thirty-year fixed-mortgage interest rates averaged 4.55 percent during July 2011, virtually unchanged from 4.56 percent in July 2010, according to Freddie Mac.  Adjustable-mortgage interest rates averaged 2.97 percent in July 2011, compared with 3.73 percent in July 2010.
• The median number of days it took to sell a single-family home was 52.1 days in July 2011, compared with 42.4 days for the same period a year ago.
• View Unsold Inventory by price point.