.California Existing-Home Sales Up 12% in July

Sales of existing single-family homes in California increased 12% in July from the same time a year ago, as the state’s median price rose for the fifth straight month.
By: Jim Carlton: WSJ.com
Sales increased to 553,910 on a seasonally adjusted, annualized basis from a revised sales pace of 494,390 in July 2008, according to a report released Tuesday by the California Association of Realtors. The inventory of unsold houses continued to drop, to 3.9 months supply in July from 6.9 months at the same time a year ago.

Median prices were off 19.6% from July 2008 to $285,480, but were up 3.9% from June—continuing a string of back-to-back sequential price increases that began in March. Officials with the Realtors’ group credited first-time buyers for much of the buying volume, helping the under-$500,000 segment of the market to jump to include 74% of statewide sales from 43% when the California housing market went into a slump two years ago.

Few experts say California’s housing market is out of the woods, though. One threat is the prospect of more foreclosures flooding the market, as the state struggles with an unemployment rate of 11.9% as of July.

And Realtors’ officials say they are concerned sales have become overly tied to first-time buyers and a federal tax credit they have used for their purchases. Indeed, James Liptak, president of the association, said nearly 40% of first-time buyers said they would not have purchased a home without the tax credit, and called for Congress to extend it beyond a Dec. 1 deadline as well as open it up to all buyers, not just first-timers.

Leslie Appleton-Young, chief economist of the association, said the high end of the California market remains soft with weak sales and prices as credit remains tight for jumbo loans.