Industry News

California real estate creates home-buying paradox

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Last year marked a continuation of the record-breaking performance of the California housing market that began in the late 1990s, according to the California Association of Realtors "2004 – 2005 State of the Housing Market" report, released today. Home sales and the median home price reached record high levels in 2004, while supply conditions and the share of first-time buyers in the California housing market fell to historic lows. The record-setting performance in 2004 eclipsed that of the previous year for the third year in a row; with the exception of a slight pause in 2001, the state's housing market has made significant advances every year since 1995. "The market performed in a somewhat paradoxical manner in 2004," said C.A.R. President Jim Hamilton. "Home sales and prices continued to advance despite declining affordability and weakness in the labor market, primarily due to low mortgage interest rates, the wealth effect among repeat home buyers, increasing use of adjusta...