A recent report shows that one in five U.S. homeowners owed more on their mortgage than their home was worth in the fourth quarter; however, California’s housing market is bucking the national trend and is telling a different story.

• Although the report by Zillow.com claims that the percentage of American single-family homes with mortgages in negative equity rose in the fourth quarter, the report does not account for seasonal changes.  The traditional home-buying season is April through August.  Historically, this time period also is when median home prices rise.  In September, median home prices generally show a declining trend, and remain steady from November through February.   The change in the median home price noted by Zillow.com is a typical year-end seasonality adjustment in price.

• Unlike the national median home price, the month-over-month changes in California’s median home price for 2009 were stronger than the long-run average.  Low interest rates and tax incentives led to a rise in the demand for housing.  As a result, housing inventory was constrained and created upward pressure on home prices.  

• California’s housing market has shown signs of stabilization since early last year.  Sales of existing, single-family homes bottomed out in August 2007, and the median home price reached its trough in February 2009.   In December, California’s median home price was 25.1 percent above the low for the current cycle.

• In December, the median price of an existing, single-family home rose to $306,820, an 8.4 percent rise year-over-year, the second consecutive year-over-year increase, and the 10th consecutive month-over-month increase, according to C.A.R.’s December sales and price report.

• Although home buyers should not focus solely on future home price appreciation, homeowners who purchase a median-priced house, live in their home for at least five years, and sell it at the then current median price, have averaged an annual rate of return of more than 11 percent, according to data collected by C.A.R. over the last 40 years.

www.CountyProperties.net