Annual California Home Sales Kept Up Strong Momentum In 2009, Prices Ended On A Good Note

Annual preliminary California home sales maintained their momentum at 546,690, rising 23.7 percent from 441,810 in 2008. The mix of sales reflected a troubled economy and a housing market dominated by distressed sales, with homes under $500,000 making up the majority of sales (78.3 percent on average), while homes in the $500,000 to $999,999 range made up only 17 percent on average and those over $1 million consisted of 4.6 percent of sales. When compared to just four years prior, the difference was striking. In 2005 homes under $500,000 consisted of 48.1 percent of sales on average, while homes in the $500,000 to $999,999 range made up 43.2 percent on average and those over $1 million consisted of 8.7 percent of sales.

 

California home prices ended the year on a good note with a preliminary December median of $306,820, an 8.4 percent year-over-year rise, continuing the trend of month-over-month gains that started in March. The preliminary annual median price fell 21.1 percent to $274,960, but the rate of decrease was less than the 37.8 percent fall in the annual median price in 2008. The slower pace of the decline is a good sign that the housing market is turning around and will continue with positive activity in 2010.

The year 2009 turned out to be a turning point in the housing market, with many signs of improvement: sales grew, the inventory levels shrank, and the median price decreased at a lower pace than in 2008 and showed positive year-over-year growth for the first time in two years. These are good indicators of anticipated improved conditions in the real estate market in 2010.