California median is low

No, it wasn't a typo. The median price of single-family resale homes in California fell 29 percent in March compared to the same month last year, falling from $582,930 to $413,980, the California Association of Realtors reported this month. Sales, meanwhile, were down 24.5 percent year-over-year in March.

Robert Kleinhenz, deputy chief economist for the statewide Realtor trade group, provided some additional details about these statistics in an interview with Inman News.

The year-over-year decline in median price in March was a record -- actually it was the sixth consecutive monthly record for a year-over-year decline. "We've never seen such year-to-year declines before, (even in) the '80s or '90s," Kleinhenz said.

During the worst periods of the '90s housing slump, year-over-year price declines were typically in the 4 percent to 6 percent range, he said, and the previous record for an annual median price drop before this latest cycle of decline was 9.9 percent.

"But this clearly is a sign of an anomaly in the market in the sense of the credit crunch basically choking off demand," he said.

The median price in the state reached an all-time record in April 2007, and if the state's single-family median price continues to hover around the low $400,000 range then the median resale price in the state may be about one-third lower than it was last year.

The state has also experienced 30 consecutive months of year-over-year declines in sales of resale single-family homes.

The year-over-year sales drops are not record-setting, Kleinhenz said, as the state experienced "severe decreases in sales in the early 1980s." There was record year-over-year sales decline of 47.3 percent in October 1981, and dwindling sales in October 2007 came close -- dropping 42 percent compared to the same month in the previous year.

CAR's Unsold Inventory Index, which measures the supply of resale, single-family detached homes, was 11.6 months in March 2008. That means it would take nearly a full year at the March sales rate to exhaust the supply of for-sale resale homes in the state. Kleinhenz said that the level is reflective of a very slow sales environment -- not of a huge inventory of for-sale homes.

"Back in the 1990s the weak economy was really the main culprit" for housing doldrums, though these days the market problems have less to do with job losses and more to do with financing troubles and people who can't make their payments, he said.