California Home Prices Down 35% From a Year Ago. Sales are up due to Distress Sales.

There may be a silver lining in falling prices and that is, homes are selling.  Maybe not at the blistering pace of the early 2000s but there is definitely a minor jump in those searching for bargains in the now heavily hit California market.  Incredibly prices are down statewide by a stunning 35%, the worst percentage yearly drop ever recorded.

This is coming in light that California is still in the midst of a housing correction and many Pay Option ARM loans are schedule to recast in the next few months.  Spring and summer always bring in increased sales but this is only a minor bump before entering the slower fall and winter seasons.  If things stay at this pace, California is on pace for a 40 to 50 percent drop from peak prices:

 

“(CNN)  On Wednesday there was some good news for California, which has been one of the hardest hit states in the housing crisis, when a local realtor group said that sales there jumped 18% in May compared to May 2007.

But the hard times are far from over: Prices took a beating, plummeting 35% during the same period, according to a report from the California Association of Realtors (CAR).

“Home sales exceeded 400,000 (on an annualized, adjusted rate) last month for the first time since early 2007,” said CAR President William E. Brown. “While this is a welcome sign for the market, it was due in part to the large share of distressed homes for sale in many parts of the state.”

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