California Home Sales Continue Winning Streak in December, Up 11 Consecutive Months

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According to the California Association of Realtors (CAR), California home sales rose for the third consecutive month in December, marking the highest level since January 2011. Sales also were up from a year ago, marking the sixth consecutive annual increase.

"With the economy slowly improving, home buyers - investors and first-time buyers alike - took advantage of affordable interest rates and made a push to close escrow by the end of year," said C.A.R. President LeFrancis Arnold.  "Robust sales over the past few months signal the housing market is treading above water on its own in the first full year without the government stimulus that has helped housing in the last couple of years."

Key facts of C.A.R.'s December 2011 resale housing report:

• Housing inventory remains tight throughout California, with the Unsold Inventory Index for existing, single-family detached homes declining to 4.2 months in December, down from 5.0 months in November and down from a 5.0-month supply in December 2010.  The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.

• Thirty-year fixed-mortgage interest rates averaged 3.96 percent during December 2011, down from 4.71 percent in December 2010, according to Freddie Mac.  Adjustable-mortgage interest rates averaged 2.79 percent in December 2011, compared with 3.31 percent in December 2010.

• The median number of days it took to sell a single-family home edged up to 58.7 days in December 2011, compared with a revised 58.0 days for the same period a year ago.

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 520,940 in December, according to information collected by C.A.R. from more than 90 local Realtor associations and MLSs statewide.  December's sales were up 3.3 percent from November's revised pace of 504,420 and were up 0.1 percent from the revised 504,420 sales pace recorded in December 2010.  The statewide sales figure represents what would be the total number of homes sold during 2011 if sales maintained the December pace throughout the year.  It is adjusted to account for seasonal factors that typically influence home sales.

The statewide median price of an existing, single-family detached home posted its second consecutive monthly gain, increasing 1.8 percent to $285,920 in December, up from a revised $280,960 in November.  However, the median price was down 6.2 percent from the revised $304,770 median price recorded in December 2010.

"Fourth quarter sales were stronger than we expected, thanks to recent improving consumer confidence and an economy that's slowly showing signs of growth.  As a result, sales came in slightly above our fall projection," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young.  "For 2011 as a whole, sales reached a preliminary 497,860 homes sold statewide, up 1.1 percent from the 492,290 homes sold in 2010.  However, the statewide median price declined 6.3 percent for the year, to reach a preliminary $285,950, down from the revised $305,010 recorded in 2010.

"Home prices are stabilizing for the distressed market, where we see robust demand, but we continue to see downward pressure on home prices in some higher end markets," said Appleton-Young.