Home sales increased 85% in December in California compared with the same period a year ago, while the median price of an existing home fell 41.5%, the California Association of Realtors reported (CAR). Sales of existing, single-family detached homes in California totaled 544,580 in December at a seasonally adjusted annualized rate, according to information collected by CAR from more than 90 local REALTOR associations statewide. Statewide home resale activity increased 85% from the revised 294,520 sales pace recorded in December 2007 (see chart above).
The median price of an existing, single-family detached home in California during December 2008 was $281,100, a 41.5% decrease from the revised $480,820 median for December 2007, C.A.R. reported (see chart above).
MP: From what you hear in the media, it would seem like we are years away from a real estate recovery, when the statistical data suggest otherwise. Falling home prices and falling mortgage rates are fueling a real estate recovery in states like California. In other words, markets are working. As the Law of Demand predicts, demand curves slope downward, and when home prices fall, the number of homes sold increases.
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