California Homes Become More Affordability: New Record Set

With home prices dropping across the country the result has been more homes have become affordable for families and now we are see Pending home sales have edged up, hinting at a possible pickup of sales activity in coming months.

The National Association of Realtors® just released their Pending Home Sales Index, a forward-looking indicator based on contracts signed in February, rose 2.1 percent to 82.1 from a reading of 80.4 in January, but is 1.4 percent below February 2008 when it was 83.3. This is a complicated way of say a lot of people have signed on the dotted line and are looking to buy homes.

The news is encouraging but the trade organization is hedging on calling this a recovery.“Pending home sales have a way to go for there to be a meaningful increase,” says Lawrence Yun, the NAR’s chief economist, but the market is continuing to underperformed, he adds.

Also in February, NAR’s Housing Affordability Index2 rose to a new high. the West index fell 13.5 percent to 89.6 and is 1.7 percent below February 2008. This is real interesting because the West with Phoenix, Las Vegas, Los Angeles and the Bay Area have seen steepest drop in prices across the country.

Home sales had been surging in California, thanks to steep price declines and foreclosure sales. But according to Dataquick, February home sales in California actually fell from January. Of the homes that sold, 58 percent were foreclosures, compared to 33 percent a year ago. Ity is not surprising that prices statewide are down 40 percent from a year ago. California, the Bay Area and Alameda residents are still search for the bottom in this housing market.

In Alameda we saw median home price drop 11% from February 2008 to 2009. The current sales year is at a pivotal month; April. Sales jumped from March to April 2008 saw a big bump in sales from 20 to 53. Early number show that March 2009 was very similar to last year and if we have hit bottom April will need to be a very busy month.

I do believe that buyer traffic is picking up, and if we believe the reports, so are sales. On the way down, a drop in sales came before the price crash. Hopefully sales are leading the same way on the way back up.

NAR Video on the two reports