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August 26, 2011 > California home sales drop amid economic jitters

California home sales drop amid economic jitters

By Terence Chea, Associated Press

SAN FRANCISCO (AP), Aug 16 - July home sales in California fell to their lowest level in 16 years as economic worries kept potential buyers on the sidelines, a real estate tracking firm reported Tuesday.

An estimated 34,695 new and resale houses and condos were sold statewide last month, an 11 percent decline from June and 1.4 percent decrease from July 2010, according to San Diego-based DataQuick.

California home sales dropped to their lowest level for the month of July since 1995 and the second lowest since 1988, when the firm's statistics begin.

DataQuick analysts attributed the decline to heightened economic uncertainty in July, when would-be buyers and sellers watched the political drama over the debt ceiling unfold in Washington.

``More people were getting cold feet as news on the economy worsened and people worried about the possibility of the nation defaulting on its debt,'' said DataQuick analyst Andrew LePage. ``There were plenty of reasons for some people to retreat to the sidelines as the future becomes less certain.''

The median California home price in July was $252,000, down 0.4 percent from June and down 6 percent from July last year, DataQuick said. The median price peaked in early 2007 at $484,000 and hit bottom in April 2009 at $221,000.

About 34.6 percent of resale home sales last month were foreclosures and 17.3 percent were short sales, when a lender allows the owner to sell for less than what is owed on the mortgage, the firm said.

On Tuesday, DataQuick reported that San Francisco Bay area home sales fell 13.9 percent from June to July, with a total of 6,887 houses and condos changing hands. Bay Area home prices on average fall 6.8 percent from June to July.

Bay Area home sales in July, however, were 1.7 percent higher than in July 2010, the first full month after the expiration of federal homebuyer tax credits.

Sales of homes costing more than $500,000 dropped 25.4 percent, while sales of less expensive ones fell 17.1 percent, DataQuick said. Sales of many lower-end homes were fueled by government-insured FHA home loans that require low down payments.

The median home price in the nine-county Bay Area dipped to $374,000, 1 percent lower than in June and 7 percent lower than in July 2010, according to the firm.

On Monday, DataQuick reported that home sales in Southern California posted their weakest July in four years.

DataQuick said 18,090 homes sold in the five-county area last month, down 11.9 percent from June. The decline was more than twice the average 4.8 percent dip in sales seen between June and July.

The median price for a home in the region was $283,000 in July, down 0.7 percent from June and 4.1 percent from July 2010, according to DataQuick.

Last month, foreclosures accounted for 32.5 percent of Southern California home sales, while short-sale transactions accounted for 17.3 percent of existing home sales.

``There was a lot of uncertainty out there over the economy, home prices and the nation's future,'' DataQuick President John Walsh said. ``And that was before the stock market turbulence hit in early August.''

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