California: Sales Rise as Home Prices Bottom

As foreclosures push down California housing prices, first-time home buyers surge into the market.
By: Alex Veiga: REALTOR®Magazine
The California median home price fell 30 percent in May, the sharpest decline in 20 years, since DataQuick Information Systems began keeping records.

The drop in home prices has sparked a home-buying rally that's beginning to reverse more than two years of monthly year-over-year sales declines.

"Inland markets hit hardest by foreclosures and falling prices are now the most likely to post higher sales than last year," says Andrew LePage, a DataQuick analyst. "These communities have been attracting first-time buyers, first-time move-up buyers and investors."

Richard Cosner, president of Prudential California Realty, says buyers of homes whose prices have declined in the last 18 months from $400,000 to $200,000 must compete with multiple bidders.

"For the first-time homebuyers and for that bottom tier of homes, we've found what the bottom of the pricing is," Cosner says.