2011 Housing Market Wrap Up and 2012 Outlook

By Robert Kleinhenz, deputy chief economist and Oscar Wei, senior research analyst California home sales improved both on a monthly and on an annual basis in November, exceeding the 500,000 benchmark for the first time in seven months.  With monthly and yearly gains of slightly over 2 percent, there were 503,570 units of existing detached homes sold when measured on a seasonally adjusted and annualized basis. Sales were the strongest in eight months and now stand 1.2 percent higher than last year on a year-to-date basis. Despite softening slightly from October, California pending home sales improved on a year-to-year basis for the seventh consecutive month.  The C.A.R. Pending Home Sales Index was at 109.8 in November, a decrease of 9.1 percent from October but up 11 percent from a year ago.  The strong year-over-year growth in pending sales observed in the last few months suggests that closed sales in December will exceed last year’s December sales figure. As for home prices, California’s median price was $280,960 in November, an increase of 1 percent from a month ago, but down 5.2 percent from a year earlier. The statewide median price had been holding steady at about $290,000 from February of this year through September, so the decline over the past two months may be explained in part by a seasonal slowdown that is typical for the time of year. Part...