Median price of a home in California increases 15.7 percent in March, sales up 7.5 percent, C.A.R. reports

LOS ANGELES (April 25) – The median price of an existing home in California in March increased 15.7 percent and sales increased 7.5 percent compared with the same period a year ago, the California Association of REALTORS® (C.A.R.) reported today.
“The median price of a home was just shy of a half-million dollars in March, although the annual rate of increase was the smallest we’ve seen since June 2003,” said C.A.R. President Jim Hamilton. “The inventory of homes for sale has increased compared to a year ago, which has lessened the upward pressure on home prices, but consumers’ perceptions that interest rates will increase continues to drive the market.”
Closed escrow sales of existing, single-family detached homes in California totaled 634,700 in March at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. Statewide home resale activity increased 7.5 percent from the 590,220 sales pace recorded in March 2004.
The statewide sales figure represents what the total number of homes sold during 2005 would be if sales maintained the March pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
The median price of an existing, single-family detached home in California during March 2005 was $495,400, a 15.7 percent increase over the revised $428,060 median for March 2004, C.A.R. reported. The March 2005 median price increased 5.2 percent compared with February’s revised $470,920 median price.
“Year-to-date sales are 6 percent ahead of last year’s pace, reflecting the continued strength of the real estate market and the improving economic fundamentals of the California economy,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “Demographic growth in the state’s population also is fueling much of this activity -- California has absorbed three million new residents since 2000.”
Highlights of C.A.R.’s resale housing figures for March 2005:
. C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in March 2005 was 2.7 months, compared with 1.3 months (revised) for the same period a year ago. 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 5.93 percent during March 2005, compared with 5.45 percent in March 2004, according to Freddie Mac. Adjustable mortgage interest rates averaged 4.23 percent in March 2005 compared with 3.41 percent in March 2004.
. The median number of days it took to sell a single-family home was 31 days in March 2005, compared with 25 days (revised) for the same period a year ago.
Regional MLS sales and price information is contained in the tables that accompany this press release. Regional sales data are not adjusted to account for seasonal factors that can influence home sales. The MLS median price and sales data for detached homes are generated from a survey of more than 90 associations of REALTORSâthroughout the state. MLS median price and sales data for condominiums are based on a survey of more than 60 associations. The median price for both detached homes and condominiums represents closed escrow sales.
In a separate report covering more localized statistics generated by C.A.R. and DataQuick Information Systems, 97.5 percent or 396 of 406 cities and communities showed an increase in their respective median home prices from a year ago. DataQuick statistics are based on county records data rather than MLS information. DataQuick Information Systems is a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. (The top 10 lists are generated for incorporated cities with a minimum of 30 recorded sales in the month.)
Note: Large changes in local median home prices typically indicate both local home price appreciation, and often, large shifts in the composition of housing market activity. Some of the variations in median home prices may be exaggerated due to compositional changes in housing demand. The DataQuick tables listing median home prices in California cities and counties are accessible through C.A.R. Online at http://www.car.org/index.php?id=MzQ4NDY.
. Statewide, the 10 cities and communities with the highest median home prices in California during March 2005 were: Los Altos, $1,605,000; Saratoga, $1,559,000; Manhattan Beach, $1,451,500; Laguna Beach, $1,350,000; Beverly Hills, $1,320,000; Palos Verdes Estates, $1,302,500; Newport Beach, $1,200,000; La Canada-Flintridge, $1,100,000; Palo Alto, $1,059,000; Los Gatos, $1,025,000.
. Statewide, the 10 cities and communities with the greatest median home price increases in March 2005 compared with the same period a year ago were: Laguna Hills, 75.1 percent; Adelanto, 66.1 percent; Atwater, 63.1 percent; Hesperia, 62.3 percent; Twentynine Palms, 60 percent; Selma, 58.9 percent; West Sacramento, 56.6 percent; Desert Hot Springs, 56.1 percent; Arroyo Grande, 52.5 percent; Barstow, 50.3 percent.
Leading the Way...® in California real estate for 100 years, the California Association of REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with more than 165,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

Realty Concepts Scores Highest in Production

The "Home of the Valley's Professionals", Realty Concepts has once again shown the Fresno Real Estate competition who's #1, by acheiving the highest "production per agent" for 2004.

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C.A.R. REPORTS CONDO MARKET GOING STRONG

Though condominiums represented just 16 percent of California home sales in 2004, about the same share as in recent years, the California condominium market is going strong, according to a recent C.A.R. report. Annual sales of condominiums were 20 percent higher in 2004 compared with 2000, and annual price appreciation of condos has surpassed that of detached homes in all but one of the past five years. With lower sales prices -- the median price for condos is generally 75 to 80 percent of the median for detached homes -- condos tend to appeal more to first-time homebuyers, who accounted for 37 percent of all condominium buyers in 2004."The condominium market segment appeals more to a slightly different customer base compared with the detached home market, with single-person households accounting for 44 percent of all condominium buyers, compared with 24 percent of all detached homebuyers," said C.A.R. President Jim Hamilton. "According to C.A.R. research, while married households accounted for 64 percent of all detached homebuyers, they accounted for just 42 percent of all condominium purchases."

PENDING HOME SALES INDEX SHOWS MODEST UPTREND

Home sales will remain strong in the months ahead, according to NAR's Pending Home Sales Index (PHSI), a new leading indicator for the housing market. Based on the number of transactions that have signed contracts but are not yet closed, the PHSI gauges home sales activity for upcoming months, as sales typically close within one or two months of contract signing.In February, the PHSI stood at 123.2, a 10.4 percent increase over the PHSI one year earlier. An index of 100 is equivalent to the average level of contract activity in 2001, the first of four consecutive years of record home sales, and therefore coincides with a historically high level of home sales activity.Regionally, the PHSI was highest in the West, where it increased 16.8 percent from one year earlier to 129.9. In the South, the PHSI increased 10.5 percent to 127.6. The Midwest and Northeast regions also experienced annual increases, reaching 121.1 and 108.4, respectively.

Discounted Commissions?

You have noticed the ads: “List your home for 4%”, “We will sell your home for 2%” or other
such headlines. With claims like that, it is only reasonable to wonder “why not?”

While all real estate commissions are negotiable, it is important to understand the effect of low commissions on your transaction, and most importantly, the impact on your net proceeds.

First, let’s take a quick look at the role of commissions in the real estate industry. When listing a property for sale, the total commission is split in half with that amount offered through the Multiple Listing Service (MLS) to any agent that brings a ready, willing, and able buyer and successfully completes the sale transaction. The other half is retained by the listing office as their compensation for the listing, marketing, and advertising of the property and their representation of the seller. These separate halves are then split again between the individual agent and their office/broker. Consequently, the average agent only earns just over one quarter of the total commission. This is their only professional compensation in real estate. There is no other income. No vacation or sick pay. No benefits. No minimum wage or employer paid health plan. That net commission paid at closing is their entire compensation, from which they pay their work expenses.

The most common commission for single family homes in this part of the country is 5-6% total commission, with 2.5 to 3% offered to the agent that brings a buyer. When a “bargain broker” says they will list your home for less, the offer a lower percent in the MLS to the selling agent. If you want to sell your home for top dollar, how does that affect you? Very simply, the “discount” commission offered will assure that many potential buyers will never see your home or will see it only after all others choices that offer a higher commission have been ruled out. Many agents, especially the best and most experienced agents (with the best clients) choose not to show these listings. Even those that will reluctantly show the property, will do so only after first trying to sell everything else that pays them more. If your occupation gave you a choice of income based on your choices, would you not choose the higher income when it represents the same responsibilities and liabilities?

Our goal in marketing your home for top dollar is to increase the exposure to as many agents and buyers as possible. We want every real estate agent in the area to aggressively want to show your home, not steer people away from it. One of the best methods to put your home at the top of every buyer’s agent’s list is to offer a good commission. It sis possible to price the property low enough that it will sell regardless of commission, but you will lose far in excess of the small difference in commission. Simply put, you will earn much more in sales price than the 1 to 2% difference between the “bargain brokers” and your full service Realty Concepts agent.
As in most areas of professional service, you get what you pay for. Do you really want the cheapest mechanic working on your car, or the cheapest doctor treating your family, or the cheapest attorney defending your rights? Real estate is no different. The cheapest is never the best. Let us focus on getting you the highest price using all of our marketing and negotiation skills. Our priority is for you to walk away with the maximum amount in your pocket.