Signs of Hope in California Housing
Right now I'm sitting in a Coco's in Canyon Country, CA, listening to Styx playing over the speakers. I bought this album back in high school...here in Canyon Country. I decided to take a look at the old neighborhood on my way out to Victorville, where I will appear live for a special CNBC Reports tonight on real estate at 8p ET.
Someone wrote me yesterday that I never say anything nice about California. He's right. But it's been very hard to say nice things during the last two years. Still, being back in Canyon Country, I realize how many opportunities California has given me, how lucky I've been to live here. People, employers, schools, and institutions have been generous with me, and I've returned the favor by paying all those taxes.
Meantime, I've actually got some good news to report, at least in the near term. Not only are more homes selling in California, median prices are finally going up as well.
"There's a lot of action if you're in the right price range," says Re/Max realtor Billy Wynn, who sells home in LA's San Fernando Valley.
"The right price range is up to $500,000. You put a sign up and you get multiple offers." Wynn says there's only a two month supply of homes $500k and under. There's a four month supply of homes priced $500k to $1 million. Things change after that. "At the upper range it's batten down the hatches," Wynn says. For homes asking more than $1 million, it's taking 15 months to sell on average.
DataQuick says the number of homes sold in California in June rose 13 percent from May and rose 26 percent from June 2008. Nearly half of those homes were foreclosures. As for prices, the California Association of Realtors says the median home price here is $275,000. That's down 26 from a year ago, but it is UP four percent from May.
As you're probably aware, many fear things will get worse before they truly get better.
Foreclosure moratoriums are lifting, and high unemployment means more people will run out of savings and default on mortgages. Banks may have thousands of homes they plan to foreclose on but are holding back to avoid flooding the market all at once. "If California leads the nation, we should be concerned," says one Deutsche Bank report. "We think the market is likely to soften again..."
Still, the sun is shining, there's an ocean breeze (ok, not in Canyon Country), and Deutsche Bank admits, "The positive signs from the California housing market are undeniable." So let's be happy with that. For now.
Tune in to CNBC Reports tonight at 8p ET/5p PT for more on real estate.
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