Freefall: California median home prices down 35% in May

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California’s housing market continued its historic decline in May, as a flood of foreclosed homes for sale drove down the median price paid for a single-family home by a stunning 35% from year-earlier levels, the California Assn. of Realtors reported today.

The median price paid for a single-family home in the state dropped by almost $210,000, from $594,530 in May 2007 to $384,840 in May 2008, the association reported. That drop represents a decline of $3,800 per week, or $549 per day, and is the highest ever measured by the association. The price decline appeared to be accelerating from April to May, as median prices dropped by 4.7% in that period.

“The statewide median price declined 35.3% to $384,840 in May, a record for year-to-year percentage decreases in the median, reflecting the effect of large numbers of short sales and foreclosures in the market,” said association Vice President and Chief Economist Leslie Appleton-Young. “With the statewide median in the $585,000- to $595,000-range through August of last year, we expect the market to continue to experience large year-to-year adjustments through the summer, even if the median price holds steady over the next few months.”

There was a glimmer of hope in the report: the number of homes sold in the state rose 18% from year-ago levels, marking the second straight month of year-over-year gains after 30 straight months of decline. The Realtors’ group attributed the pickup in sales to a flood of cheaper houses -- many previously foreclosed on -- that has dramatically changed the state’s real estate market. Additionaly, inventory of for-sale homes has decreased when expressed in terms of how long it would take to sell off all the inventory: ‘C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in May 2008 was 8.4 months, compared with 10.7 months (revised) for the same period a year ago,’ the association reported.

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