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State's Hot Resale Market Cooled Down in August : Construction Unit Reports Seasonally Adjusted Home, Multifamily Building Permit Rate Declined 6.3% in July

October 02, 1988

The torrid pace of California's resale housing market cooled off somewhat in August, with a 1.4% drop in detached home sales and only a slight increase in the median sales price from July in most areas of the state, according to the California Assn. of Realtors.

On an annualized, seasonally adjusted basis, 572,490 houses closed escrow in August, down 1.4% from the 580,759 in July, according to Joel Singer, the association's chief economist. He added that the slowdown may have been precipitated by a further drop in the CAR's unsold inventory index.

The index fell to a record low of 3.8 months in August, down from 4 months in July and 4.8 months a year ago, Singer said. The index measures the number of months it would take to deplete the supply of detached homes on the resale market at the current month's rate of sales.

Orange County remained the most expensive major region in the state, with a median resale price of $224,828 in August, up 2.4% from July's $219,542 and up 32.1% from the August, 1987, median price of $170,211, Singer said.

San Francisco was second, with an August median resale price of $216,216, followed by Ventura, $214,146; Los Angeles, $193,106; San Diego, $152,147; Riverside/San Bernardino, $106,533, and Sacramento, $99,358.

On the new home front, California's housing production--as measured by the annual permit rate, declined in July to 245,300, down 6.3% from the 261,900 housing units in June, according to Roger C. Werbel, president of the California Building Industry Assn. (CBIA).

Single-family production declined 8.4% to 157,800 annual rate permits in July, down 8.4% from the 172,300 in June. Multifamily permits declined 2.3%, from 89,600 in June to 87,500 in July, he added.

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