California home sales dropped nearly 21 percent in July from a year ago, another indication of a possible slowdown after the expiration of homebuyer tax credits.
Buyers last month purchased 440,000 single-family homes based on a seasonally adjusted annualized rate, according to the California Association of Realtors. The median price rose 10 percent from July 2009 to $314,850.
For the entire U.S., single-family sales in July tumbled nearly 26 percent to about 3.4 million homes, the lowest number in 15 years.
“July’s sales decrease was not unexpected, given the strong sales activity we saw in May when buyers took advantage of expiring federal and state homebuyer tax credits,” said Association President Steve Goddard. “This likely pulled forward sales that otherwise would have closed in June or July.”
To be eligible for the federal credits, homebuyers had to sign a sales contract by April 30, though they have until Sept. 30 to close escrow. To get in line for a shot at the $100 million set aside for the state credit, buyers needed to apply by Aug. 15.
In July the state’s High Desert region had the biggest drop in sales, down 40 percent from a year ago. Sales fell 20 percent for Los Angeles, 26 percent in Sacramento, 32 percent in Monterey County and 17 percent in the Bay Area.
The Association’s Unsold Inventory Index for single-family in July rose to nearly six months, compared to four months a year before. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.
As to the future, Goddard said that even without a tax incentive, buyers on the sidelines “should take advantage of historically low interest rates and current home prices.”
However, other analysts maintain that a sluggish economy, high unemployment and a backlog of foreclosures and other distressed properties will continue to hold down housing sales.
— Robert Digitale