Dennis' Mortgage Blog

April was not the month when home sales in California reversed their downward trends in volume and prices.  In most years April is the month when home sales begin to grow with sales rising through the spring into summer.  Not this year.

According to DataQuick, a real estate research firm in San Diego, home sales in California dropped 3.3% from sales in March with a total of 35,202 sales.  While the overall volume dropped from March, DataQuick stated the median home price remained at $249,000 in April--that same median price as March.

April 2011 home sales were down 6.1% from April 2010 in volume and the median sales price was 2.4% lower than one year ago.  Much of the volume decrease however can be attributed to the increase in home sales in 2010 that was due to the homebuyer tax credit of up to $8000 being offered to qualified buyers. 

Of the more than 35,000 sales in April more than half were distressed properties, foreclosures or short-sales.  If there is a silver lining in more than 17,000 homes being sold in one month that were distressed sales, it is that the percentage of such sales were lower in April 2011 than similar sales in March 2011 and April 2010.  Distressed sales in April 2011 were 54.2% of sales, whereas March 2011 the number was 56.3% and 55.8% a year ago.

Locally Southern California homes sales were down 5.5% from March and 9.2% from last April.  Southern California sales were 52% of the total California market in April.

The DataQuick report is for all home sales, new construction and existing home sales.  This morning the Commerce Department reported that new home construction in April was down over 10%.  Homebuilders are facing strong competition in most of their markets from foreclosures of homes that those same builders sold not too long ago as new homes. 

Despite continued low rates and reports of a rebounding economy, families are not entering the housing markets and reducing inventories and bidding up values.  Month to month sales numbers will be somewhat more meaningful in showing the market trend for the next couple of months due to the impact the tax credits had on last year's sales. So far that trend is downward.

Negative housing news is usually good news for mortgage rates as it forecasts a delay in economic recovery and continued low rates.  Today rates opened up slightly lower than yesterday's close and after some continued improvement after opening closed close to their opening.

If you are waiting for rates to drop further get your application in for your purchase or refinance and take advantage of the dip we have been experiencing.

Mortgage rates continue to remain low for the time being.  Call or email Dennis today to determine your purchasing power for a new home loan or monthly savings from a refinance.  Mention code DCS05, apply before May 31, 2011 and close before July 10, 2011 and receive a credit for your appraisal at closing .  Direct dial 562-472-1118