Increasing domiciliate sales declining home prices stricter loan guidelines and the financial merchandise meltdown all contributed to a turbulent year in our California housing merchandise according to the recent California Association of Realtors (C. A. R.)Housing Report I construe this week. The report noted that approximately one in five home sales in California were the result of foreclosure short sale or borrower default.
Sales generally improved over last year in all parts of the state with significant price declines leading to sharp increases in the Central Valley and Southern California. C. A. R said. Realtors attributed the increase to the growth in the absorption of distressed properties with mark-downs in prices.
Reports show the market continuing to experience large decreases in the coming months before leveling out in late 2009. The California median determine is expected to further decline by 6% from $381,000 for 2008 to $358,000 for 2009. Realtors noted that affordability was high for first-time home buyers increased dramatically (approx 53%) during the third accommodate of 2008 resulting from this decline in median home prices.
Increasingly restrictive lending standards and the ascribe crunch resulted in the inability for many other first-time domiciliate buyers to qualify for a owe loan. Because of the ongoing turmoil in the financial merchandise many lending institutions declined loans that were considered risky especially jumbo loans with amounts that exceeded Fannie Mae and Freddie Mac guidelines.
As conventional loans became more difficult to obtain and the ascribe crunch contracted advance the percentage of FHA loans increased significantly in California. FHA loans typically require lower down payments and undergo less rigid credit-qualifying guidelines than conventional loans.
C. A. R attributes this significant obtain partially to the Economic Stimulus Act of 2008 which temporarily raised the conforming loan check in high-cost areas from $417,000 to $729,750 until December 31. 2008.
Other highlights from the C. A. R. Housing Report included:
Distressed properties sold during 2008 had a median sales determine of $330,000 a median determine per square foot of $197 and a median size of 1,600 square feet.
More than half of the distressed properties sold were REO (54.8%)
The reject between sales price and list price increased from 4.3% in 2007 to a record setting 7.5% in 2008
One in five properties cut out of escrow in 2008. Primary reasons included: buyers could not secure financing (33.3%); buyer changed object due to worry of economy or loss of job (33.3%); and buyer could not come up with the down payment (10.8%)
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