California home sales fall to 1988 levels
Low inventory stifles demand as market recovers from bust
The home sales volume in California is on a downward trajectory as the state deals with a limited supply of desirable inventory and the Homeowner Bill of Rights, which is stalling the foreclosure process.
The drop is not tied to demand since buyers are reportedly on the hunt for properties across the West Coast state.
Roughly 36,000 new and resale houses sold statewide in September, down 15.3% from August, but up 5.9% from a year ago, according to DataQuick.
The September sales count is hovering at one of the lowest levels recorded in years, considering more than 40,000 homes sold in 2009 during the midst of the economic downturn.
"Some of that imbalance is just a natural result of a market that is still working its way back to normal, with still many homeowners deeply underwater and unable to sell because of that,” explained RealtyTrac vice president Daren Blomquist.
He added, “But some of the lack of available inventory is due to foreclosure inventory being held back by the Homeowners Bill of Rights in California, which took effect in January 2013. I would argue this law, which makes it more difficult for lenders to foreclose in the state, has held back foreclosure inventory that otherwise would have been listed for sale this year, which in turn is helping to prop up home prices."
Blomquist said the law cut the state's foreclosure pace in half, while home price appreciation doubled.
The median price paid for a home in California hit $355,000 in September, down 1.7% from August, but up 23.7% from last year. September also was the 19th consecutive month in which the state's median sales price increased annually.
Of the existing homes sold last month, 7% were foreclosures, the lowest foreclosure-resale level on record since 2007.
Meanwhile, short sales made up roughly 13.1% of the homes that resold in September, down from 13.3% in August, and a 27.5% drop from a year earlier.
The typical monthly mortgage payment that California home buyers committed to in September hit $1,429 per month, down slightly from $1,456 in August, but up from $1,027 a year ago.