Industry Insights Uncategorized

December CAR Trends Report: 2010 Housing Market Recap

January 6, 2011
The December 2010 CAR Trends Report has been posted to the Research Data section on the Marketing page of SAVI.
In it, CAR reports that three main housing indicators show 2010 was a year of transition toward stability in the housing market:
1.     Median Price. At $296,820 in November, the state median price experienced its first year-over-year decline after 12 consecutive months of gains. With a 21% rise above the February 2009 trough of $245,230, the median price in California could be an indication of the beginning of stability in the market.
2.     Sales. Year-to-date sales dropped 9.8% in November, consistent with CAR’s forecast of a 10% annual decrease. The seasonally adjusted sales in November were up 93% from the trough of 254,650 three years ago, and were 19% above the long run annual average over the past 39 years. Despite the year-to-date drop, sales figures are faring reasonably well when historical data is taken into consideration.
3.     Unsold Inventory. The unsold inventory index is a good indicator of home prices because when the housing supply falls below seven months, it usually leads to price appreciation. The November unsold inventory index was 6.2 months. Because this index has maintained a relatively healthy range in 2010, between 4.6 and 6.6 months, it is another indication of the beginning of stability in the California housing market.
The number of distressed sales compared to overall sales is also important in determining the health of the real estate market. For the past few years, there have been significant numbers of distressed properties on the market. In 2010, the share of distressed sales relative to all sales declined to 41% from 46% in 2009. Although there are still many distressed properties for sale, this reduction is a good sign that the market is heading in the right direction.
To access the full report, click here.

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