California home sales hit seven-month high in December

Los Angeles Business Journal – California home sales rose in December, posting their highest level since May, according to a report from the California Association Of Realtors® (C.A.R.), as the inventory of unsold homes dwindled.


  • Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 520,680 units in December, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. December’s sales were up 5.9 percent from November’s revised pace of 491,590 units, but were down 6.8 percent from the revised 558,840 sales pace recorded in December 2009. The statewide sales figure is adjusted to account for seasonal factors that typically influence home sales.
  • Following three consecutive monthly declines, the median price of an existing, single-family detached home sold in California increased 1.7 percent from a revised $296,690 in November but was down 1.6 percent from the revised $306,860 median price recorded for the same period a year ago.
  • “December’s sales increase reflects buyers taking advantage of rock bottom interest rates and improved affordability since the first half of the year, when prices were higher,” said C.A.R. President Beth L. Peerce. “Most of December’s sales opened escrow in October and November. Rates hit their absolute lowest in October but began edging higher in November, prompting buyers to get off the fence,” she said.
  • For more about the California housing market, watch a video of C.A.R. Chief Economist Leslie Appleton-Young as she discusses highlights of the December sales and price report.

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More transparency for variable-rate loans

The New York Times – Changes to the Truth in Lending Act have helped make loan documents more understandable for many borrowers, but some people with more complicated, fluctuating mortgages may still struggle to grasp all the terms. Read the full story

Federal officials studying how to protect housing market

The Washington Post – Federal official took steps last week to attempt to reduce the likelihood of a second financial crisis caused in large part by large declines in the housing market. Read the full story 

Study finds California mortgage applicants have highest credit scores – California mortgage applicants have the highest average credit scores in the nation, according to a state-by-state study conducted by Mortgage Marvel, a nationwide online mortgage-shopping service. The average credit score in California is 755, a full 20 points higher than the national average. Read the full story

What you should know about the market

  • Before you sign on the dotted line for that apartment or home whose great price you just can’t pass up, make sure you’ve figured out how your new location is going to fit into your life. It might just end up costing you more in commute costs as affordable housing moves from the urban cores to the suburbs.
  • A new study by the Center for Neighborhood Technology has found that a growing number of communities that are considered affordable aren’t quite so affordable when transportation costs are factored in to the median income.
  • Its analysis of 377 metropolitan areas, which includes 161,000 neighborhoods and 80 percent of the U.S. population, found that even though seven out of 10 U.S. communities are considered affordable, that number decreases to two in five — or 39 percent — when transportation costs are included in the mix.
  • Housing is considered affordable if it costs less than 30 percent of household income, and the analysis ups that to 45 percent when transportation costs are added in.
  • But considering that transportation is the second-largest household expense next to housing, it often costs more than the allotted 15 percent of the budget.
  • The Center for Neighborhood Technology actually found that the portion of household income most people spend ranges from 12 percent in walkable communities with sidewalks, nearby stores, and public transportation to 32 percent for those who have no option but to drive long distances to get anywhere.
  • When communities have few transportation options and require driving long distances for basic necessities, already stressed household budgets are very vulnerable to spikes in gas prices and rising transportation costs,” said Scott Bernstein, president and founder.