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California sales spike reflects distress

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The statewide median home price will fall an estimated 31.7 percent in 2008, to $381,000 -- which is the first annual decline in the state since 1996, according to a California Association of Realtors report released this week. An additional 6 percent drop is expected in 2009, to $358,000. Meanwhile, sales of resale detached homes are expected to jump 12 percent to 395,600 in 2008 compared to 2007, with a projected additional 12.5 percent gain in 2009. The sales jump and the tailspin in prices has a lot to do with a spike in distressed sales -- about 19.8 percent of sellers sold their property because they were in default, were in a foreclosure process, or owed more on their mortgage than their home would fetch in a sale. "The increase in sales is largely attributed to the growth in the absorption of distressed properties with markdowns in prices," the Realtor group reported. The number of sellers who sold their home at a loss rose from 11.9 percent in 2007 to a r...