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Housing Market OutlookSilicon Valley Association of REALTORS®
April 1, 2008
Robert A. Kleinhenz, Ph.D.Deputy Chief EconomistCalifornia Association of REALTORS®
Economic Outlook
Gross Domestic Product
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
8%
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008f
----
Q1
Q2
Q3
Q4
Year 2007: +2.5%; 2007 Q4: +0.6%
ANNUAL PERCENT CHANGE, CHAIN-TYPE (2000) $
ANNUAL QTRLY
Unemployment RateCalifornia vs. United States
-4%
-2%
0%
2%
4%
6%
8%
10%
Jan
-90
Ju
l-90
Jan
-91
Ju
l-91
Jan
-92
Ju
l-92
Jan
-93
Ju
l-93
Jan
-94
Ju
l-94
Jan
-95
Ju
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Jan
-96
Ju
l-96
Jan
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Ju
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Jan
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Ju
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Jan
-99
Ju
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Jan
-00
Ju
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Jan
-01
Ju
l-01
Jan
-02
Ju
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Jan
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Jan
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Jan
-05
Ju
l-05
Jan
-06
Ju
l-06
Jan
-07
Ju
l-07
Jan
-08
US-CA CA US
SOURCE: CA Employment Development Division
Employment Growth, California vs. U.S.
YEAR TO YEAR % CHANGE
-3
-2
-1
0
1
2
3
4
5
Jan
-91
Ju
l-91
Jan
-92
Ju
l-92
Jan
-93
Ju
l-93
Jan
-94
Ju
l-94
Jan
-95
Ju
l-95
Jan
-96
Ju
l-96
Jan
-97
Ju
l-97
Jan
-98
Ju
l-98
Jan
-99
Ju
l-99
Jan
-00
Ju
l-00
Jan
-01
Ju
l-01
Jan
-02
Ju
l-02
Jan
-03
Ju
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Jan
-04
Ju
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Jan
-05
Ju
l-05
Jan
-06
Ju
l-06
Jan
-07
Ju
l-07
Jan
-08
California US
Year-to-Year % Change in Jobs
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
To
tal N
on
-F
arm
Co
nstr
ucti
on
Tra
ns &
Uti
l
Fin
an
ce &
Insu
ran
ce
Real E
sta
teR
en
tal/L
easin
g
Pro
f S
ci &
Tech
Svcs
Mg
mt
of
En
terp
rises
Ed
uc S
vcs
Healt
h C
are
an
d S
ocia
lA
sst
2007 2008 2009
% Change
California 2007-2009
+340K jobs
SOURCE: CA EDD, LAEDC Forecast
Consumer Price Index
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
Jan
-00
Ap
r-00
Ju
l-00
Oct-
00
Jan
-01
Ap
r-01
Ju
l-01
Oct-
01
Jan
-02
Ap
r-02
Ju
l-02
Oct-
02
Jan
-03
Ap
r-03
Ju
l-03
Oct-
03
Jan
-04
Ap
r-04
Ju
l-04
Oct-
04
Jan
-05
Ap
r-05
Ju
l-05
Oct-
05
Jan
-06
Ap
r-06
Ju
l-06
Oct-
06
Jan
-07
Ap
r-07
Ju
l-07
Oct-
07
Jan
-08
All Items
Core
February 2008: All Items 4.1% Y-T-Y; Core 2.3% Y-T-Y
PERCENT CHANGE FROM A YEAR AGO, 100=1982-1984
Historically Low Inflation In Past 20 Yrs
0%
2%
4%
6%
8%
10%
12%
14%
16%
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
CPI-All Items
CPI-Core
Year 2007 Inflation: 2.4%
PERCENT CHANGE FROM A YEAR AGO, 100=1982-84
U.S. Economic Forecast
2003 2004 2005 2006 2007 2008f
US GDP 2.5% 3.6% 3.1% 2.9% 2.2% 1.5%
Nonfarm Job Growth
-0.3% 1.1% 1.7% 1.8% 1.1% 0.5%
Unemployment 6.0% 5.5% 5.1% 4.6% 4.6% 5.2%
CPI 2.3% 2.7% 3.4% 3.2% 2.9% 3.1%
Real Disposable Income
2.4% 3.4% 1.2% 2.6% 3.0% 2.0%
SOURCE: California Association of REALTORS®
California Economic Forecast
2003 2004 2005 2006 2007 2008f
Nonfarm Job Growth
-0.5% 1.0% 1.8% 1.8% 0.7% 0.5%
Unemployment Rate
6.8% 6.2% 5.4% 4.9% 5.4% 6.2%
Population Growth
1.7% 1.5% 1.3% 1.3% 1.1% 1.1%
Real Disposable Income, % Change
2.1% 3.1% 1.6% 1.8% 3.0% 1.0%
SOURCE: California Association of REALTORS®
Economy through 2008
• GDP Growth below par: ~1 to 2%• First half of year weak, stronger in last half• Weak but positive job growth for US, CA,
and its regions• Unemployment rate up slightly• Inflation a concern but in check• Uncertainty about economy, credit crunch,
and housing market
California HousingMarket Outlook
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
Jan
-00
Ap
r-00
Ju
l-00
Oct-
00
Jan
-01
Ap
r-01
Ju
l-01
Oct-
01
Jan
-02
Ap
r-02
Ju
l-02
Oct-
02
Jan
-03
Ap
r-03
Ju
l-03
Oct-
03
Jan
-04
Ap
r-04
Ju
l-04
Oct-
04
Jan
-05
Ap
r-05
Ju
l-05
Oct-
05
Jan
-06
Ap
r-06
Ju
l-06
Oct-
06
Jan
-07
Ap
r-07
Ju
l-07
Oct-
07
Jan
-08
0
20
40
60
80
100
120
140
160
Sales Consumer Confidence INDEXUNITS
Sales of Existing Detached Homes & Pacific West Consumer Confidence
California, February 2008 Sales: Down 29.1% Y-T-D, Down 28.5% Y-T-Y
SOURCE: California Association of REALTORS®; The Conference Board
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000Jan
-00
Ju
l-00
Jan
-01
Ju
l-01
Jan
-02
Ju
l-02
Jan
-03
Ju
l-03
Jan
-04
Ju
l-04
Jan
-05
Ju
l-05
Jan
-06
Ju
l-06
Jan
-07
Ju
l-07
Jan
-08
Median Price of Existing Detached HomesCalifornia, February 2008: $409,240, Down 26.2% Y-T-Y
SOURCE: California Association of REALTORS®
-32%
-27.7%-32.5%
-36.4%
-52.4%
-26.4%
-3.4%
-60%
-50%
-40%
-30%
-20%
-10%
0%
Below $500,000 $500,000-999,999 Over $1 Million
Aug-07 Sep-07
Lower Price Ranges Hit Hardest, but…Percentage Change in Sales YTY
SOURCE: California Association of REALTORS®
…Credit Crunch slammed high end in September
Before Credit Crunch-Peak vs Current Price
RegionPeak
Month Peak PriceAug-07 Median
% Chg From Peak
Northern California Aug-05 $440,420 $370,390 -15.9%Sacramento Aug-05 $394,450 $332,510 -15.7%Central Valley Aug-05 $363,680 $309,740 -14.8%High Desert Apr-06 $334,860 $287,390 -14.2%Riverside San Bernardino Jan-07 $415,160 $377,130 -9.2%Northern Wine Country Jan-06 $645,080 $600,000 -7.0%Ventura Aug-06 $710,910 $669,870 -5.8%Orange County Apr-07 $747,260 $710,380 -4.9%San Diego May-06 $622,380 $595,070 -4.4%Palm Springs/Lower Desert Jun-05 $393,370 $377,920 -3.9%San Luis Obispo Jun-06 $620,540 $598,400 -3.6%San Francisco May-07 $853,910 $832,760 -2.5%Santa Clara Apr-07 $868,410 $860,000 -1.0%Monterey Region Aug-07 $798,210 $798,210 0.0%Los Angeles Aug-07 $605,300 $605,300 0.0%
Peak vs Current Price-February 2008
RegionPeak
Month Peak PriceFeb-08 Median
% Chg From Peak
Sacramento Aug-05 $394,450 $258,680 -34.4%High Desert Apr-06 $334,860 $220,380 -34.2%CALIFORNIA Apr-07 $597,640 $409,240 -31.5%Northern Wine Country Jan-06 $645,080 $449,000 -30.4%Riverside San Bernardino Jan-07 $415,160 $289,660 -30.2%San Diego May-06 $622,380 $450,710 -27.6%Ventura Aug-06 $710,910 $520,270 -26.8%San Luis Obispo Jun-06 $620,540 $471,740 -24.0%Los Angeles Aug-07 $605,300 $467,200 -22.8%Monterey Region Aug-07 $798,210 $619,790 -22.4%Northern California Aug-05 $440,420 $347,650 -21.1%Orange County Apr-07 $747,260 $596,520 -20.2%San Francisco May-07 $853,910 $706,880 -17.2%Palm Springs/Lower Desert Jun-05 $393,370 $334,910 -14.9%Central Valley*(Aug 2007) Aug-05 $363,680 $309,740 -14.8%Santa Clara Apr-07 $868,410 $780,000 -10.2%
Unsold Inventory IndexCalifornia, February 2008: 14.3 Months
0
2
4
6
8
10
12
14
16
18
20
Jan
-88
Ju
l-88
Jan
-89
Ju
l-89
Jan
-90
Ju
l-90
Jan
-91
Ju
l-91
Jan
-92
Ju
l-92
Jan
-93
Ju
l-93
Jan
-94
Ju
l-94
Jan
-95
Ju
l-95
Jan
-96
Ju
l-96
Jan
-97
Ju
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Jan
-98
Ju
l-98
Jan
-99
Ju
l-99
Jan
-00
Ju
l-00
Jan
-01
Ju
l-01
Jan
-02
Ju
l-02
Jan
-03
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Jan
-04
Ju
l-04
Jan
-05
Ju
l-05
Jan
-06
Ju
l-06
Jan
-07
Ju
l-07
Jan
-08
SOURCE: California Association of REALTORS®
MONTHS
Listings by Month, Selected YearsCalifornia (1982-2007 Average=100)
0
1020
30
4050
60
7080
90
100110
120
130140
150
160170
180
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2006 2007 2008
SOURCE: California Association of REALTORS®
Record High: March 1983 200May 1992 176
Record Low: Feb 2004 26
2008
Credit Crunch ≠ Tighter Underwriting
Tighter Underwriting Standards • Subprime and other less-qualified borrowers initially.• Later spread to well-qualified borrowers.
Credit or Liquidity Crunch • Investors who normally provide funds to Lenders on
sidelines. Source for jumbo loans.• $$$ in safe havens (Treasuries) because of risk
elsewhere.• Fewer $$$ available, even for well-qualified borrowers
in recent months.
SOURCE: Federal Home Loan Mortgage Corporation
Mortgage Rates
6.7%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
Jan
-91
Jul-
91Ja
n-9
2Ju
l-92
Jan
-93
Jul-
93Ja
n-9
4Ju
l-94
Jan
-95
Jul-
95Ja
n-9
6Ju
l-96
Jan
-97
Jul-
97Ja
n-9
8Ju
l-98
Jan
-99
Jul-
99Ja
n-0
0Ju
l-00
Jan
-01
Jul-
01Ja
n-0
2Ju
l-02
Jan
-03
Jul-
03Ja
n-0
4Ju
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Jan
-05
Jul-
05Ja
n-0
6Ju
l-06
Jan
-07
Jul-
07Ja
n-0
8
FRM
ARM
Federal Funds
SOURCE: Federal Home Loan Mortgage Corporation – 30-yr FRMFederal Reserve Board – 10-Year T-Bond
30-Year FRM vs. 10-Year T-Bond
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
Jan
-91
Ju
l-91
Jan
-92
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Jan
-93
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Jan
-94
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Jan
-95
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-01
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-02
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-07
Ju
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Jan
-08
FRM
10-YearT-Bond
RiskPrem
Average. Risk
Premium: 1.6%
5.4%
2.2%
0%
1%
2%
3%
4%
5%
6%
7%
Q1/7
4Q
1/7
5Q
1/7
6Q
1/7
7Q
1/7
8Q
1/7
9Q
1/8
0Q
1/8
1Q
1/8
2Q
1/8
3Q
1/8
4Q
1/8
5Q
1/8
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1/8
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1/8
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1/9
0Q
1/9
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1/9
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1/9
4Q
1/9
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1/9
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1/9
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1/9
8Q
1/9
9Q
1/0
0Q
1/0
1Q
1/0
2Q
1/0
3Q
1/0
4Q
1/0
5Q
1/0
6Q
1/0
7
Delinquency Rate Foreclosure Rate
Mortgage Foreclosure & Delinquency RatesCalifornia
SOURCE: Mortgage Bankers Association
Delinquencies: Long Run Average: 3.9%
Foreclosure Rate: Long Run Average: 0.81%
Framing the Sub-Prime* Situation
Right $$$ House & Right Mortgage • Not in trouble - no fix necessary
Right $$$ House but Wrong Mortgage • Can refinance out of problem
Wrong $$$ House and Wrong Mortgage • Defaults, workouts, foreclosures, etc.
Troublesome
Categories
* Really should be “Non-Prime” Situation
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q1 2
003
Q2 2
003
Q3 2
003
Q4 2
003
Q1 2
004
Q2 2
004
Q3 2
004
Q4 2
004
Q1 2
005
Q2 2
005
Q3 2
005
Q4 2
005
Q1 2
006
Q2 2
006
Q3 2
006
Q4 2
006
Q1 2
007
Q2 2
007
Q3 2
007
Q4 2
007
CA US
% OF HOUSEHOLDS THAT CAN BUY
First-time Buyer Housing Affordability IndexCalifornia Vs. U.S. 2003-2007
SOURCE: California Association of REALTORS®
Local Outlook
Nonfarm EmploymentBay Area Region
SOURCE: California Economic Development Dept.
Jan 2008 Jan 2007 Change % Change
San Francisco 985.4 964.5 20.9 2.2%
Oakland 1,033.0 1,032.2 0.8 0.1%
San Jose 903.7 892.3 11.4 1.3%
Napa/Solano 124.4 124.5 -0.1 -0.1%
Sonoma 189.2 186.7 2.5 1.3%
Total 3,235.7 3,200.2 35.5 1.1%
Nonfarm Employment (Thousands)
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Jan
-98
Ap
r-98
Jul-9
8O
ct-9
8Ja
n-9
9A
pr-
99Ju
l-99
Oct
-99
Jan
-00
Ap
r-00
Jul-0
0O
ct-0
0Ja
n-0
1A
pr-
01Ju
l-01
Oct
-01
Jan
-02
Ap
r-02
Jul-0
2O
ct-0
2Ja
n-0
3A
pr-
03Ju
l-03
Oct
-03
Jan
-04
Ap
r-04
Jul-0
4O
ct-0
4Ja
n-0
5A
pr-
05Ju
l-05
Oct
-05
Jan
-06
Ap
r-06
Jul-0
6O
ct-0
6Ja
n-0
7A
pr-
07Ju
l-07
Oct
-07
Jan
-08
0
20
40
60
80
100
120
140
160Sales Consumer Confidence
SOURCE: California Association of REALTORS®; The Conference Board
INDEXUNITS
Sales of Existing Detached Homes and Pacific West Consumer Confidence
Bay Area, February 2008: 1,532 Units, Down 36.4% Y-T-D, Down 32.5% Y-T-Y
2007 Sales Down 44% from Peak Year 2004
Alameda 325 276 537 17.8% -39.5% -42.7%Contra Costa 132 122 243 8.2% -45.7% -37.3%Marin 92 81 138 13.6% -33.3% -30.0%San Francisco 182 143 186 27.3% -2.2% -16.0%San Mateo 213 154 273 38.3% -22.0% -31.8%Santa Clara 433 349 694 24.1% -37.6% -40.1%Santa Cruz 73 69 133 5.8% -45.1% -42.3%Solano 155 137 199 13.1% -22.1% -30.3%Sonoma 177 160 251 10.6% -29.5% -33.1%
Y-t-DY-t-YCounty Feb-08 Jan-08 Feb-07 M-t-M
Sales of Existing Detached HomesBay Area Counties
SOURCE: California Association of REALTORS®
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000Jan
-00
Ap
r-00
Ju
l-00
Oct-
00
Jan
-01
Ap
r-01
Ju
l-01
Oct-
01
Jan
-02
Ap
r-02
Ju
l-02
Oct-
02
Jan
-03
Ap
r-03
Ju
l-03
Oct-
03
Jan
-04
Ap
r-04
Ju
l-04
Oct-
04
Jan
-05
Ap
r-05
Ju
l-05
Oct-
05
Jan
-06
Ap
r-06
Ju
l-06
Oct-
06
Jan
-07
Ap
r-07
Ju
l-07
Oct-
07
Jan
-08
Median Price of Existing Detached HomesBay Area, February 2008: $706,880, Down 5.0% Y-T-Y
SOURCE: California Association of REALTORS®
Median Price of Existing Detached Homes
Alameda 574,292$ 596,774$ 657,271$ -3.8% -12.6%Contra Costa 693,877$ 666,666$ 811,747$ 4.1% -14.5%Marin 964,285$ 1,062,500$ 963,414$ -9.2% 0.1%San Francisco 769,737$ 816,964$ 843,220$ -5.8% -8.7%San Mateo 910,950$ 875,000$ 870,000$ 4.1% 4.7%Santa Clara 780,000$ 750,000$ 790,000$ 4.0% -1.3%Santa Cruz 685,000$ 606,000$ 720,000$ 13.0% -4.9%Solano 338,793$ 321,428$ 446,491$ 5.4% -24.1%Sonoma 447,435$ 510,870$ 589,285$ -12.4% -24.1%
Feb-07 M-t-M Y-t-YCounty Feb-08 Jan-08
Bay Area Counties
SOURCE: California Association of REALTORS®
SOURCE: California Association of REALTORS®
UNITS
Sales of Existing Detached HomesSanta Clara County Sales, 2007: -22.5% YTY, 2008: -40.1% YTD
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Jan
Feb
Mar
Ap
r
May
Jun
Jul
Au
g
Sep
t
Oct
No
v
Dec
20062004200520072008
ANNUAL MONTHLY
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000Jan
-89
Ju
l-89
Jan
-90
Ju
l-90
Jan
-91
Ju
l-91
Jan
-92
Ju
l-92
Jan
-93
Ju
l-93
Jan
-94
Ju
l-94
Jan
-95
Ju
l-95
Jan
-96
Ju
l-96
Jan
-97
Ju
l-97
Jan
-98
Ju
l-98
Jan
-99
Ju
l-99
Jan
-00
Ju
l-00
Jan
-01
Ju
l-01
Jan
-02
Ju
l-02
Jan
-03
Ju
l-03
Jan
-04
Ju
l-04
Jan
-05
Ju
l-05
Jan
-06
Ju
l-06
Jan
-07
Ju
l-07
Jan
-08
SOURCE: California Association of REALTORS®
Median Price of Existing Detached HomesSanta Clara County, February 2008: $780,000, Down 1.3% Y-T-Y
Median Home Sales PriceSanta Clara County
Feb-08 Feb-07Yearly % Change
Campbell $655,000 $671,500 -2.5%Gilroy $510,000 $696,000 -26.7%Milpitas $650,000 $649,000 0.2%Mountain View $784,000 $758,000 3.4%San Jose $597,500 $659,000 -9.3%Santa Clara $620,000 $645,000 -3.9%Sunnyvale $741,750 $704,750 5.3%
SOURCE: C.A.R.; DataQuick Information Systems. The price statistics are derived from all types of home sales -- new and existing, condos and single-family.
Sales of Existing Detached Homes
SOURCE: California Association of REALTORS®
San Mateo County Sales, 2007: -16.0% YTY, 2008: -31.8% YTD
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
1991
1993
1995
1997
1999
2001
2003
2005
2007 0
100
200
300
400
500
600
700
Jan
Feb
Mar
Apr
May
Jun Ju
l
Aug
Sept Oc
t
Nov
Dec
20062004200520072008
UNITS ANNUAL MONTHLY
Median Price of Existing Detached Homes
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000Jan
-91
Ju
l-91
Jan
-92
Ju
l-92
Jan
-93
Ju
l-93
Jan
-94
Ju
l-94
Jan
-95
Ju
l-95
Jan
-96
Ju
l-96
Jan
-97
Ju
l-97
Jan
-98
Ju
l-98
Jan
-99
Ju
l-99
Jan
-00
Ju
l-00
Jan
-01
Ju
l-01
Jan
-02
Ju
l-02
Jan
-03
Ju
l-03
Jan
-04
Ju
l-04
Jan
-05
Ju
l-05
Jan
-06
Ju
l-06
Jan
-07
Ju
l-07
Jan
-08
SOURCE: California Association of REALTORS®
San Mateo County, February 2008: $910,950, Up 4.7% Y-T-Y
Median Home Sales PriceSan Mateo County
Feb-08 Feb-07Yearly % Change
Daly City $554,000 $684,500 -19.1%Pacifica $590,000 $662,500 -10.9%Redwood City $875,000 $767,500 14.0%San Mateo $750,000 $772,500 -2.9%
SOURCE: C.A.R.; DataQuick Information Systems. The price statistics are derived from all types of home sales -- new and existing, condos and single-family.
Notices of Default – Bay AreaHouses and Condos
SOURCE: Data Quick Information Systems
County/Region 2007Q3 2007Q2 2006Q3 QTQ%Chg YTY%Chg
San Francisco 252 257 149 -1.90% 69.10%
Alameda 2,126 1,612 803 31.90% 164.80%
Contra Costa 3,216 2,316 1,012 38.90% 217.80%
Santa Clara 1,655 1,275 670 29.80% 147.00%
San Mateo 581 463 290 25.50% 100.30%
Marin 172 118 89 45.80% 93.30%
Solano 1,513 1,065 510 42.10% 196.70%
Sonoma 749 462 231 62.10% 224.20%
Napa 163 128 43 27.30% 279.10%
Bay Area 10,427 7,696 3,797 35.50% 174.60%
Median Household Income
SOURCE: American Community Survey (Census Bureau), Compiled by California Association of REALTORS®
$56,600
$77,900 $80,800
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
California San Mateo County Santa Clara County
Santa Clara, San Mateo, and California
California Forecast
California Housing Market Forecast
2003 2004 2005 2006 2007 2008f
SFH Resales (thousands)
601.8 624.7 625.0 477.5 353.3 332.1
% Change 5.1% 3.8% 0.04% -23.6% -26.0% -6.0%
Median Price ($ thousands)
$372.7 $450.8 $524.0 $556.6 $558.1 $424.0
% Change 17.9% 20.9% 16.2% 6.2% 0.3% -24.0%
30-Yr FRM 5.8% 5.8% 5.9% 6.4% 6.3% 5.8%
1-Yr ARM 3.8% 3.9% 4.5% 5.5% 5.6% 5.0%
SOURCE: California Association of REALTORS®
Sales More Volatile Than Prices
UNITS/MEDIAN PRICE $
SOURCE: California Association of REALTORS®
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
Sales of Existing Detached Homes Median Price
California Sales of Existing Homes and Median Price
-61% -25%
-47%
Summary
•Existing Home Sales: 2007: -26%, 2008: -6%
•Statewide Median Price: Continuing decrease (15-25%)
•Low end weak…Payment resets, Foreclosures
•High end weak…Credit/Liquidity Crunch
•Tighter Underwriting Standards…maybe too tight
•Affordability to remain low, THEREFORE…
•Stabilizing sales, no significant recovery in next 6-12 months
The Bottom Line for Households
•Homeowners are generally in a positive equity position if
bought before 2005, so don’t panic!
•Sell if you must, hold if you can.
•If you must sell, then price home to sell and not to sit.
•Buyers should not expect bargains in all markets. Must do
homework and consult with a REALTOR®
•Find a home that meets needs and fits budget…buy it!
•Opportunities for investors, but must do homework.
Thank You!
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