photo from Bloomberg Business Week |
By all accounts, California’s housing market should start getting better with the infusion of cash from the federal government. Yet there are conflicting signs that beg the question whether the state needs the money, whether the money will help, or whether the state needs more money. Confused?
Here are two interesting statistics for you. In July, California actually ended up having the 3rd best housing market in the nation. It was only behind Maine and South Dakota in home appreciation prices. However, that figure was tainted by the fact that the nation’s housing market was falling, so California’s gain was compared to a distressed marketplace.
Come August and sales figures show California slipping again, especially in southern California where home sales slid around 14%. Home prices also fell 2.4% from July, although still ahead of last year’s figure. This is disappointing news to many home builders, who thought the housing crush would turn around this year and had started buying up large plots of land to start building again. With numbers like these, as well as the continually high foreclosure rate, it would seem that building new homes without confirmed buyers would be a mistake right now.
What’s keeping things down? A quote from the chief economist of the California Association of Realtors, Leslie Appleton-Young, said it best: “When you get an economy that’s rife with fear and uncertainty, what do people do? Nothing.”
Still, this means when the economy does turn around that there are lots of affordable houses available all over the state, and a savvy buyer with good credit and some funds to spend can get a great deal right now.
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Mitch writes on real estate, finance, and many other things.