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| More rates and news from California Housing Market Showing Signs Of Life(Which would you rather have in a real estate market if you were an investor or seller; sales increases or price increases?)
Ideally, you would want both and this was true in about 95 percent of the United States markets during the real estate boom (2000 to 2005). But now you’re lucky if you get one or the other.
You may think to yourself that if you have an increase in sales, then that will lead to a price increase over time, tight? Well, maybe.
Jesus Sanchez, staff writer for the Los Angeles Times, explains how California may finally have the upper hand in the real estate market, in his article, “Existing home prices tumble despite sales up tick,” which was published November 28, 2006.
Nationwide pre-existing home sales increased in October but the median sales price recorded its largest year-over-year decline in over 30 years, according to the National Association of Realtors (NAR).
“In California, October results were the opposite, with sales, excluding condominiums, slipping 0.3% from the previous month and the median sales price gaining 2% from October 2005 to $548,680, according to the California Assn. of Realtors.” So, while California home sales continue to fall, its prices have finally begun to increase again, something investors in the state have been waiting for several months to transpire.
The national housing market does not look as bright as its yearly figures show a slight price increase with significant sales decreases.
“‘After a period of price adjustment, we'll see more confidence in the market and a lift to home sales should be apparent in the first quarter of 2007,’ NAR economist David Lereah said in a statement. ‘The annual decline in the October median home price is skewed because there was an uncharacteristic spike in October 2005, but the trend for the fourth quarter will be prices remaining slightly below a year ago. Overall prices are projected to see modest appreciation around early spring.’”
But many economists believe that Mr. Lereah is spewing out wishful thinking like he has all year long, denying each month that the buyer’s market is emerging and now growing.
The number one factor pointing to a prolonged buyer’s market nationwide is the increasing amount of unsold homes (inventory). According to the NAR, inventory increased 1.9 percent in October to an absurd amount of 3.85 million pre-existing homes.
As most of the country ponders about the future of its market, California is happy just to be experiencing something positive. California was the state that lead the boom and also the current buyer’s market. Investors and sellers are now hoping that California will be the first state to turn the market again in their favor.
“‘While it appears that home sales have stabilized over the past three months, it's too soon to say whether or not the market has bottomed out,’ CAR President Colleen Badagliacco said in a statement. ‘We do expect smaller year-over-year declines in home sales for the remainder of the year.’”
Everyone one wants a magic ball to tell him or her what will happen in the real estate market nationally and locally. This is obviously impossible, so California homeowners will take the price increase with a grain of salt and hope it means that their suffering is ending.
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