Sales Increased As Distressed Sales Surged at the Regional Level
Sales during the month of November generally improved over last year in all parts of the state, while median prices continued to decline at significant rates. Sales in the Central Valley and Southern California performed better than the Bay Area, although these gains were due primarily to the surge in distressed sales with steeply discounted prices. By comparison, the Bay Area has experienced weakness in sales because of prevailing high prices and the scarcity of jumbo loans.

2008 Survey of California Home Buyers - Highlights
The housing market has confronted headwinds on several fronts since early 2007. Tighter underwriting standards, the global liquidity crunch, sluggish economic growth, and higher fuel and food prices are some of the factors that led to the downturn in the housing market. As the housing market dropped sharply from its record sales levels that were set in 2005, home buyers changed their attitudes and behaviors towards home buying and adapted to the new housing environment.

Affordability Surges in First Quarter
First-time home buyer affordability jumped in the first quarter of 2008 as mortgage rates remained low and home prices continued to decrease. The median price of a home in California fell by a record 14.3 percent quarterly margin from $488,950 in the fourth quarter of 2007 to $419,240 in the first quarter of this year.

2007-2008 State of the California Housing Market Report - Highlights
After a disappointing 2006, the housing market seemed to have stabilized in early 2007, with sales of existing detached homes holding steady at around 450,000 homes and the median price staying near $560,000. In the spring, however, tighter underwriting standards drove sales below 400,000 units, mostly at the expense of homes below $1 million. However, because the market above $1 million was not affected as severely, the statewide median price held steady, with slight year-to-year gains. By mid-year, even that segment of the market was choked off by the adverse effects of the global liquidity crunch that had a more pronounced impact on homes over $500,000, which relied on jumbo loans.