Home sales, affordability continue downward trend
Statewide median price drops nearly 10 percent; cost of ownership out of reach for most

The pace of new home sales remained sluggish in September, the California Building Industry Association reported last month.

The monthly CBIA/Hanley Wood Market Intelligence (HWMI) New Home Sales and Pricing Report showed that new home sales in September were 45 percent below the same month a year ago.

During September, 3,394 homes and condominiums were sold in the California subdivisions tracked by HWMI compared to 6,220 in the same month a year ago. Sales of single-family homes dropped by 39 percent while sales of townhomes fell 36 percent and condominiums dropped 65 percent.

The median sales price for homes statewide fell 9.7 percent.

Jonathan Dienhart, director of published research for HWMI, blames the sluggish sales on lagging consumer confidence and the ongoing credit problems in the mortgage market.

"The problems relating to credit availability don't seem like they will be resolving themselves in the near future," Dienhart said. "Until we have stabilization in the broader market of real estatebacked securities, access to financing will remain restrictive for many potential homebuyers."

Dienhart said consumers are also very wary about home purchasing in general.

"Many would-be homebuyers have taken themselves out of the market because they see it as too risky, and until this perception improves, we will continue to experience a degree of paralysis in the new and existing home markets," he said.

Affordability still down

Despite the falling home prices, California remains the nation's least affordable market for housing in the third quarter, the building industry says.

On a statewide basis, just 12.6 percent of all the homes sold could be afforded by a medianincome family, up slightly from 11.7 percent in the second quarter.

"Despite market corrections that have made some areas more affordable, the fact remains that the cost of housing in California is out of reach for many hardworking families who want to be able to buy their first home," said Robert Rivinius, CBIA's president and CEO.

California now has 25 of the 30 least-affordable markets in the nation," Rivinius said.

Napa County saw a significant decrease in affordability, overtaking Los Angeles County as the nation's least affordable market - only 3.3 percent of homes sold were affordable to a medianincome family.

Los Angeles County had been the least-affordable market in the nation for 11 consecutive quarters, but is now second with affordability inching upward to 3.7 percent. Monterey County was the third least-affordable market (4.2 percent), followed by Orange County (4.8 percent) and San Luis Obispo County (5.7 percent).

Nationwide, 42 percent of new and existing homes sold in the third quarter were affordable to families earning the national median income.