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August home prices decline 41%

The median price of an existing single-family residence falls to $350,140, report says.

September 26, 2008|From Bloomberg News

California home prices tumbled a record 41% in August from a year earlier as foreclosure sales pushed down values.

The median price of an existing single-family detached home fell to $350,140, the lowest since March 2003, and will probably fall further, the Los Angeles-based California Assn. of Realtors said Thursday in a report.

Sales, however, increased 56.7% from August 2007 and 1.8% from July.

"While sales appear to have turned the corner, the median will experience additional downward pressure as we move into the off-peak season in the coming months, and will continue to face pressure from distressed sales," said Leslie Appleton-Young, chief economist of the association.

Prices fell in all 20 of the state's regions surveyed.

California prices have declined 11 straight months beginning in October 2007, although the rate of decrease has slowed, said Richard Kleinhenz, deputy chief economist of the group.

"The rate is shrinking month to month, but we've seen these margins shrink before going up again," he said.

The median house price peaked at $595,000 in May 2007.

Homes priced under $500,000 made up 72% of August sales compared with 40% a year earlier, because of the increase in distressed sales, which include homes in foreclosure and so-called short sales, in which the purchase price is less than what the owner owes on the house.

"We think defaults peaked in the second or third quarter this year, with foreclosures peaking six months after that, or in first half of 2009," Kleinhenz said.

More than 101,000 California households received a default notice, were warned of a pending auction or foreclosed on in August, according to a report issued this month by RealtyTrac Inc., a seller of default data.

That was one-third of the nation's total and represented one in 130 homes in the state.

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