"Despite the uncertain outlook, interest rates are at near-record lows and home prices are favorable," said CAR Vice President and Chief Economist Leslie Appleton-Young.
Closed escrow sales of existing, single-family detached homes in California dropped 4.1% to a seasonally adjusted 458,440 units in July, according to information collected by CAR from more than 90 local realtor associations and MLSs statewide.
July home sales were up 4.5% from the 438,850 units sold in July 2010. The statewide sales figure represents what would be the total number of homes sold during 2011 if sales maintained the July pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
"Although July sales improved over last year, they were somewhat weaker than expected, given current prices and mortgage rates," Appleton-Young said. "Economic uncertainty and recent developments in financial markets have caused hesitation among buyers, the effects of which we may see in the coming months."
"We must see sustained job and income gains along with an increase in consumer confidence before we can expect to see consistent improvement in the housing market," she added.
The statewide median price of an existing, single-family detached home sold in California dipped 0.3% in July to $294,230 from a revised $295,210 in June. July's median price was down 7.6% from the $318,550 recorded in July 2010.
"Despite the uncertain outlook, interest rates are at near-record lows, and home prices are favorable," said CAR President Beth L. Peerce. "Well-qualified, motivated buyers who expect to own their home for more than a few years should carefully study their options now."
Other aspects of CAR's resale housing report for July 2011 include:
* The Unsold Inventory Index for existing, single-family detached homes was 5.5 months in July, up from 5.0 months in June, but essentially unchanged from July 2010's 5.6-month supply. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.
* Thirty-year fixed-mortgage interest rates averaged 4.55% during July 2011, virtually unchanged from 4.56% in July 2010, according to Freddie Mac. Adjustable-mortgage interest rates averaged 2.97% in July 2011, compared with 3.73% in July 2010.
The median number of days it took to sell a single-family home was 52.1 days in July 2011, compared with 42.4 days for the same period a year ago.