California Home Prices: SoCal Down 27 Percent Year over Year.

The California housing market continues to face severe pressure from distressed properties.  Currently the amount of inventory on the market is near 1 year and prices for the region have fallen a stunning 27 percent on a year over year basis.  Each of the major counties are now down $100,000+ from their bubble peaks.  About one-third of all sales are distressed properties which only adds pressure to the future trend of the market.

“(DQnews)  The median price paid for a Southland home was $370,000 last month, down 3.9 percent from $385,000 in April and down 26.7 percent from the peak median of $505,000 in May 2007. That peak was reached several times in the spring and summer of last year. Last month’s 26.7 percent annual decline in the median is the largest drop in DataQuick’s statistics. The last time the median was lower than May’s $370,000 was in March 2004, when it was $364,000.The median has dropped mainly for two reasons: depreciation, especially in inland markets, and the sharp drop off in the past nine months of home sales financed with jumbo mortgages, previously defined as over $417,000. Before the credit crunch hit in August 2007, making jumbos pricier and harder to obtain, nearly 40 percent of Southland sales were financed with them. Last month jumbos accounted for just 15.8 percent of sales, up from 15.1 percent in April.”

Not good news for a California economy that is facing a major budget shortfall this year.

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