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December 2013 Sales Fell 18.4 Percent from December 2012

December 2013 California single-family home and condominium sales fell 18.4 percent from December 2012.  Sales for all of 2013 were down 6.0 percent compared to 2012.

Over the past 12 months, there has been a dramatic shift in the mix of distressed property sales relative to non-distressed property sales. In December 2013, non-distressed property sales gained 10.3 percent for the year while distressed property sales fell 54.5 percent.

Homeowner Equity

The steady rise in home prices since January 2012 has allowed thousands of underwater California homeowners to exit their negative equity positions. Since August, the number of homeowners with more than 10 percent equity has increased by 4.1 percent, or 200,000.  In addition, the number of homeowners who are moderately to severely underwater has fallen by 12.8 percent or 160,000.

Despite the improvement in homeowner equity, the number of underwater homeowners in California remains high. In December, nearly 1.8 million (20.8 percent) out of a total of 8.6 million homeowners were effectively underwater and shut out of the California real estate market.

Medan Prices

The December 2013 median price of a California home gained 5,000 dollars, or 1.4 percent to 365,000 dollars from 360,000 dollars in November. Median prices have hovered near 360,000 dollars since June.

Cash Sales

Cash sales as a percent of total sales continue to decline. In December, cash sales represented 23.8 percent of total sales, down from the peak of 33.0 percent in February 2013. Despite the recent decline, cash sales remain high and are an important part of the real estate marketplace.

Flipping

December Flip sales - defined as reselling a property within six months - gained 9.2 percent, recovering some of November's 17.9 percent decline. Despite the December gain, flips are down 6.7 percent from a year ago. December Flips represented 5.1 percent of total sales, up from 4.8 percent in November.

Investor Purchase Activity

December 2013 investor market purchases (purchases by LLCs and LPs) gained 6.5 percent, reversing some of November's 21.6 percent decline. In general investor market purchases have been trending lower since peaking in December 2012. Rapid increases in purchase prices have reduced investor's return on investment thus lowering investor demand.

Foreclosures

California foreclosures in December 2013 remain near their lowest levels in our records dating back to January 2007.

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