The California real estate market is one of the fastest speeds of life in the world. There is nowhere else where property is fiercely traded, competitively and with as much risk as in this state. A recent report on the number of California home sales released in December 2007 showed more than 25,000 housing units and homes – both new-handed and turned into resale that month.
While the figure is impressive, it is actually unchanged from the November home sales figure, and has actually fallen more than 40% since November 2006, when home sales were recorded at 43,400. Records show that home sales have steadily declined over the past 27 months, and December sales were the lowest for that particular month since records were first maintained in 1988. This decline in intermediate home prices can be explained mostly by the slow sale of high-value assets, which is a direct result of instability in the credit industry. In December 2007, 17,500 homes purchased in California with corresponding loans were purchased for $ 417,000, a significant decrease of about 30% from December 2006, when the number of homes purchased with similar loans was about 25,000.
As such, 4,600 homes in California were purchased for more than $ 417,000, representing a 70% decrease since December 2006, when the number of homes purchased was more than 15,000. In Southern California, home sales levels were extremely low. In December 2007, many real estate sellers, buyers and lending institutions monitored the market closely. While the number of new homes in Riverside, Los Angeles, San Diego, San Bernardino, Orange County and Ventura increased by 0.5% from the previous month – from just 13,100 in November to around 13,200 – it is still 45% in the same period of the year The decline represents earlier, when the number of houses sold was slightly over 24,200. We previously noted that foreclosures were on the rise, and in fact during the last quarter of 2007, default mortgage notices were at their highest levels in 15 years.
Much of this increase in restricted assets goes hand in hand with home depreciation. Many homeowners have suddenly found themselves in a position to lend more on mortgages than on property on the market. A large number of people who have foreclosed may feel the pressure of high mortgage rates, reduced income or even the need to move to another state.