California Market Report
October, 2008
Current Period
Last Period
Last Year
Month-to-Month Change
Year-to-Year Change
Existing Home Sales
490,850
482,290
313,310
1.8%
56.7%
Median Home Price
$350,140
$350,890
$588,670
-0.2%
-36.8%
Unsold Inventory Index
6.7 months
6.7 months
10.6 months
0.0%
-36.8%
Median Days On Market
47.3
47.5
54.7
-0.4%
-13.5%
30-Year Fixed Mortgage
6.48%
6.43%
6.57%
0.05%
-0.09%
Source for statistics: California Association of Realtors
 
California Market Analysis
You would have to be living inside a bubble not to have heard all of the negative economic news over the past few weeks. Perhaps, the best way to describe what has taken place is that a financial crisis has merged with an economic recession. These issues are in no way confined to just the U.S. In fact, many countries are impacted every bit as much as the U.S.– some even more. While many Americans may feel the 800-billion-dollar bailout plan that Congress approved is morally wrong, most economists agree that it is a pragmatic approach that should lessen the impact of the crisis. Although the overall economy may be dismal, the real estate market is making a slow but very nice recovery. For example, closed sales last month were up 57% from one year ago. In addition, housing prices were almost unchanged from the last month, and interest rates are still very low. The increased conforming and FHA loan limits, the bailout of Fannie Mae and Freddie Mac, and the Stimulus Package have all created additional loan programs and funds for these programs. These changes, along with lower housing prices, have brought buyers off the sidelines. Although the recent financial problems have caused the stock market plunge and affected overall consumer confidence, it will likely make real estate a more desirable investment product. And why shouldn’t it? After all, real estate appreciates in the long term. You can write off the interest and property taxes. And it is the only investment in which you can live.