California Real Estate Market Snapshot – June 2011

We are all familiar with the term “PRICE” when buying a home; however, we may not be as familiar with the term “COST” of buying a home. The COST of buying a home factors in the PRICE, and the mortgage interest rate. If you are one of less than ten percent of buyers who can purchase a home for all cash, then PRICE is most important. However, for most buyers the COST is most important when it comes to buying a home. This is because the affordability of the monthly out-of -pocket expense for a home is more critical than what is actually paid for it. Mortgage rates are currently the lowest they have been in fifty years. We must also go back nearly a decade to find home prices as low as they are today. All this translates into a very low COST housing market. National statistics indicate that home prices are declining. However, California is experiencing a more stable market. In fact, the chief economist for the California Association of Realtors®, Leslie Appleton-Young, has predicted that real estate prices in California will rise two percent in 2011. It has also been predicted by Fannie Mae, Freddie Mac, and the National Association of Realtors® that mortgage rates will increase nearly a percent within the next twelve months. These two indicators reveal that next year will still be a very good time to buy, but no time like the present! Prices are not expected to return to the highs of 2005 for several more years. Your Realtor® can give you a clearer picture if now is a good time for you to sell, based on your particular circumstances.

Market Report

June, 2011 Current
Period
Last
Period
Last
Year
Month-to-Month
Change
Year-to-Year
Change
Existing Home Sales 499,830 514,660 476,150 -2.9% 5.0%
Median Home Price $293,570 $286,510 $307,000 2.5% -4.4%
Unsold Inventory Index 5.4 months 5.3 months 4.9 months 1.9% 10.2%
Median Days On Market 53.0 56.7 37.4 -6.5% 41.7%
30-Year Fixed Mortgage 4.84% 4.84% 5.10% 0.00% -0.26%

Source: California Association of REALTORS®

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