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California home sales down 14% from year ago
Buyers weary of delays, economic uncertainties, Realtor group says

by Jeb Bing

A weak economy and tightened financing conditions contributed to a slowdown in California home sales and median price during May, the California Association of Realtors reported this week.

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 471,840 units in May, according to information collected by CAR from more than 90 local Realtor associations and MLSs statewide.

May home sales were down 5.8% from April and down 14.4% from the previous year. The statewide sales figure represents what would be the total number of homes sold during 2011 if sales maintained the May pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

"Market demand has been sluggish as would-be home buyers remain concerned about the direction of the economy. They may also be weary of delays in the buying process and difficulty in getting a home loan," said CAR President Beth L. Peerce.

"This, combined with lenders putting distressed properties on the market at a more deliberate pace, is contributing to homes sitting on the market longer," she added.

The statewide median price of an existing, single-family detached home sold in California edged down 0.7% in May to $291,760 from a revised $293,800 in April. May's median price was down 10.9% from the $327,460 recorded in May 2010.

"May's sales decline was not unexpected because of a sharp decrease in April pending sales and an unusually strong performance last May, when expiring tax credits pushed home sales and prices to extremely high levels," said CAR Vice President and Chief Economist Leslie Appleton-Young.

"The monthly decline in sales and the median home price reflect the slowdown in the economic recovery over the past couple of months, which has affected virtually all aspects of consumer spending," she said.

Other highlights of CAR's resale housing report for May 2011:

The Unsold Inventory Index for existing, single-family detached homes was 5.4 months in May, unchanged from April, but up compared with May 2010's 4.5-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 4.64% during May 2011, down from 4.89% in May 2010, according to Freddie Mac. Adjustable-mortgage interest rates averaged 3.13% in May 2011, compared with 4.01% in May 2010.

The median number of days it took to sell a single-family home was 51.8 days in May 2011, compared with 37.8 days for the same period a year ago.