James Frangella, Monterey, Carmel, Pacific Grove real estate specialist
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Monterey real estate, James Frangella
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by James Frangella
written on July 31, 2009 @ 6:00am

The first six months of the year are over and the stats are in. Let's get down to the nitty-gritty. Click HERE to see the average selling prices for Peninsula cities as of June 30th of this year.

It's no surprise to see that the averages are moving downward from the peak years of 2005 (and for some cities 2006 was their highest average sold price). Note that Carmel is proving still to be a strong market. It has experienced only about a 10% drop in their average selling price. It is interesting to compare Peninsula sales activity with the nationwide updates. The following are quotes from one of our recent real estate journals:

Earlier reports show that sales of existing homes nationwide rose last month for the third consecutive month, while sales of new homes increased in June by the largest percentage in eight years, according to the NATIONAL ASSOCIATION OF REALTORS® (NAR) and the U.S. Commerce Dept., respectively.

• Although some skeptics believe the market is pausing before home prices decline further, the median price in California’s housing market appears to be stabilizing. June marked the fourth consecutive month of rising home prices and the second largest gain on record for the month of June, based on statistics dating back to 1979. The year-to-year decline in June also was the smallest in the past 16 months.

• The S&P/Case-Shiller price index for 20 cities showed a half-percent gain when May was compared with April. It was the first month-over-month increase in the index in 34 months. “It is very possible that years from now we will say that April 2009 was the trough in home prices,” said Maureen Maitland, vice president for index services at Standard & Poor’s.

• One explanation for the increase in median prices is the rise in demand from buyers, especially first timers taking advantage of the $8,000 federal tax credit, which expires in December. The NATIONAL ASSOCIATION OF REALTORS® (NAR) is lobbying for the tax credit to be extended and to be replaced with a $15,000 credit for all buyers.

• Another factor in the market’s resurgence is the prevalence of foreclosures, which make up about a third of all existing home sales. “Although another surge of foreclosures is expected later this year, demand remains strong, so the market may be able to absorb more distressed properties without significantly impacting the median price,” said C.A.R.’s Chief Economist Leslie Appleton-Young.

We have five more months to go to year’s end. The flurry of buying activity in the affordable home market is just nuts. Reports of 34 offers on a bank-owned listing are not uncommon. The financed first-time home buyers are pitted against the all-cash investors. Those young couples looking for their first home are not having an easy time either. That is another story in itself.

Stay tuned …