California’s Chief Real Estate Economist says California has a Bi-Polar Market

Leslie Appleton-Young, V.P. and Chief Economist for the California Association of Realtors, recently addressed a crowd of about 700 real estate professionals in the East Bay.

“California has a very distinct bipolar market,” said Appleton-Young. She is referring to the normal market versus the foreclosure market. Foreclosures are accounting for more than 50% of home sales in some California counties. The market dynamics and psychology for the two markets are very different.

According to Appleton-Young, California hit market bottom for real estate transactions in October of 2007. The number of transactions has been on the rise ever since, though median price is still settling.

Median home price erosion continues as a result continued foreclosures putting downward pressure on the mid to low end of the market and price decline on the high end due to financing difficulties associated with jumbo loans.

The Mortgage Bankers Association is reporting a decline in loan originations in September. This will show up in October and November sales results.

Home sales in California are improving faster than the nation.

California has seen a 24% improvement for first time homebuyers as a result of price declines.