Year     Median Price     Percent Change
1968         $23,210                     NA
1969         $24,230                     4.4%
1970         $24,640                     1.7%
1971         $26,880                     9.1%
1972         $28,810                     7.2%
1973         $31,460                     9.2%
1974         $34,610                     10.0%
1975         $41,600                     20.2%
1976         $48,630                     16.9%
1977         $62,290                     28.1%
1978         $70,890                     13.8%
1979         $84,150                     18.7%
1980         $99,550                     18.3%
1981         $107,710                     8.2%
1982         $111,800                     3.8%
1983         $114,370                     2.3%
1984         $114,260                   -0.1%
1985         $119,860                     4.9%
1986         $133,640                    11.5%
1987         $142,060                     6.3%
1988         $168,200                     18.4%
1989         $196,120                     16.6%
1990         $193,770                     -1.2%
1991         $200,660                     3.6%
1992         $197,030                     -1.8%
1993         $188,240                     -4.5%
1994         $185,010                     -1.7%
1995         $178,160                     -3.7%
1996         $177,270                     -0.5%
1997         $186,490                     5.2%
1998         $200,100                     7.3%
1999         $217,510                      8.7%
2000         $241,350                    11.0%
2001         $262,350                     8.7%
2002         $316,130                     20.5%
2003         $371,520                     17.5%
2004         $450,990                     21.4%
2005         $524,020                     14.00%
2006         $576,000                    10.10%

2007        $560,000                     .7%

2008         $346,000                    -38.2%
2009         $355,000                     2.6%
2010         $385,000                     8%

• Above data provided by The California Association of Realtors and SDAR.
• Median Price. Represents the price at which half the homes sold above, and half the homes sold below. It is the midpoint price of home sales in each year. Average Annual Price Increase. Over this 43-year period, the average annual price increase in California has been around 7.4 %.

The conventional wisdom when selling a home has always been to wait until the ‘Spring Buying Season’. Over the years, that has seemed to make sense and is now accepted as a good strategy for those who want to sell their house and receive the best possible price. This real estate market has shattered many previously held beliefs. The wisdom of waiting for a spring market is another belief that is about to fall. Here are five reasons why?

1.) Interest Rates Are On the Rise

Interest rates have spiked up rather dramatically over the last ninety days and are now over 5%. Initially, an increase in rates has a positive effect on the market as it forces buyers off the fence. However, it also eats into a buyer’s purchasing power. As rates increase, the mortgage amount a buyer qualifies for decreases. This will eventually have a negative impact on prices.

2.) Your Dream Home Will Never Be Cheaper

If your family goal is to sell your current house and take advantage of the fabulous selection of properties currently available to buy the home of your dreams, DO IT NOW! Prices will continue to soften in most markets. However, if you are buying, COST should be more important than PRICE. Cost can be dramatically impacted by rising mortgage interest rates. Do the math and decide if now is the time.

3.) Buyers Are Out Early

There is mounting evidence that buyers are coming out earlier this year. A belief that now is a good time to buy coupled with the increase in interest rates has started the buying season early.

Pete Flint, CEO of Trulia:

“We’re seeing a national resurgence of buyer and seller activity on Trulia.com. In January alone, we experienced an unprecedented level of site traffic including 11 million unique visitors – which is more than 70 percent year-over-year growth. We’ve are now experiencing 100,000 property views per minute.”

The National Association of Realtors just reported that the number of house  sales increased 12.9% over last month.

4.) Inventory Increases Every Spring

Every year there is an increase of inventory which comes to market as we approach the spring. Here is the number of listings available for sale in 2010.

• February – 3,531,000
• March – 3,626,000
• April – 4,029,000

We believe there will be an increase in these numbers in 2011 as there is a pent-up selling demand created by the weak market of the last few years. You won’t have to worry about this increasing competition if you sell now.

5.) We Are in the Eye of the Foreclosure Storm

While banks are trying to rectify their foreclosure procedures, there is a large supply of discounted properties which has been delayed coming to market. This inventory will be released sometime in the next few months. Foreclosures sell on average at a 41% discount. When released they will be competing with your house for the buyers in the marketplace. If you are looking to sell in 2011, you want to sell before this inventory becomes your competition.

CNN Money quoted the leadership Of RealtyTrac on this issue:

“We’ve now seen three straight months with fewer than 300,000 properties receiving foreclosure filings, following 20 straight months where the total exceeded 300,000,” said James Saccacio, CEO of RealtyTrac.

“Unfortunately,” he added, “This is less a sign of a robust housing recovery and more a sign that lenders have become bogged down in reviewing procedures, resubmitting paperwork and formulating legal arguments related to accusations of improper foreclosure processing.”

“We expect a spike in the first quarter,” said Rick Sharga, a RealtyTrac spokesman.

by The KCM Crew

There are three questions you should ask before purchasing in today’s market:

1. Why should I buy if house prices are still depreciating?

We believe that in most parts of the country prices will in fact soften in 2011. Price is the major concern for anyone selling a home. When you are buying, COST should be your primary concern however. Your monthly payment (cost) is definitely impacted by the price of the home you purchase. The other major component is the interest rate. Waiting for prices to bottom out while rates are increasing can wind up costing you more over the life of the mortgage (see chart here).

Over the last seven weeks, rates have increased over 1/2 a point going from 4.17 to 4.86. Looking at the attached chart shows this increase. Waiting for prices to bottom out seems to make perfect sense. Yet, at a time when rates are increasing, it might NOT make sense. Make sure you have a mortgage professional help you with this math before making a decision.

In an article last week CNN Money reported:

“You can kiss those record lows goodbye,” said Greg McBride, chief economist for Bankrate.com.

Keith Gumbinger of HSH Associates, a provider of mortgage information said that the market reached a new plateau.

“I don’t think we’re going back to a 50-year low anytime soon without an economic collapse,” he said. “Rates will probably never revisit those levels.”

2. When will I begin to see appreciation if I buy now?

This is a great question. Macro Markets, LLC is a company that studies housing prices. They started their Home Price Expectation Survey in 2010.  They ask 100+ housing industry experts to project housing prices through 2015. The most current survey shows that the experts are predicting prices to soften until 2012. The experts then project prices to rise reaching a cumulative appreciation of over 10% by 2015.

Purchasing a home today makes great sense from a financial standpoint. Think of the old axiom: You want to buy low and sell high. We may be at the low point regarding the COST of a home. But, this decision should not only be a financial one.

That leads us to our third and final question:

3. Why am I buying a home in the first place?

This truly is the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with finances. The Fannie Mae National Housing Surveyshows that the four major reasons people buy a home have nothing to do with money:

• A good place to raise children and for them to get a good education
• A place where you and your family feel safe
• More space for you and your family
• Control of the space

What non-financial benefits will you and your family derive from owning a home? The answer to that question should be the reason whether you decide to purchase or not.

Bottom Line

The COST of a home will probably remain relatively unchanged even if prices continue to depreciate. Don’t allow money to get in the way of you making the right decision for you and your family. In the long run, the finances will work in your favor anyway. From Keeping Current Matters by The KCM Crew

What this new law appears to mean is this: if you complete your short sale on your residential property, there will be no deficiency obligation on the first mortgage. Unlike the existing Section 580b which only protects borrowers with “purchase money loans” on their primary residence, the new 580e catches all first loans on all residential properties regardless of whether they have been refinanced or not. While there are some ambiguities, the statute states that there will be no deficiency for any note secured by a first deed of trust or first mortgage.

While this is good news with respect to first mortgages, the statute has no effect on liability regarding junior loans (seconds, thirds, HELOCs, etc). Sellers will still need to work with and negotiate with their lenders on obtaining a release of liability from the juniors. However, this is a huge step for homeowners as the first trust deed has always been the bulk of their worries.

Now, however, we’ve begun hearing that the rate of inflation is a bit too low, according to the Fed. For most of us, this is a rather foreign concept, though we are aware that deflation can do a great deal of damage, as Japan has demonstrated over the past decade. The Fed will do what it can to make even more money available and thus keep rates as low as possible, hopefully stimulating more lending, investing and consumer purchases in our economy.

The most recent Consumer Price Index (CPI) underscores the reasons for the Fed’s concern. The overall rate at which consumer prices rose in September was a very small 0.1%. Even more important, perhaps, the core rate (with volatile food and energy prices removed) didn’t rise at all. It was the second month with a 0% rate of increase. As a result, the annual core rate of inflation moderated to 0.8%, which is as low as that indicator has been in almost 40 years.

Now, most economists still assert that the threat of genuine deflation remains quite low. That would explain the Fed’s on-going reassurances that it will almost certainly begin purchasing Treasury securities again in large quantities. Doing so, economists often remind us, should keep interest rates at record lows and perhaps even add slightly to the inflation rate.

GMAC, one of the largest servicers of U.S. residential loans, is still reviewing and modifying foreclosures that were poorly documented, but “as each case is reviewed and addressed, it moves forward,” spokeswoman Gina Proia said.

The Ally Financial unit helped spark concerns of a nationwide problem last month, when it suspended evictions and post-foreclosure closings in 23 states after discovering widespread errors in its foreclosure procedures.

Bank of America, which also suspended foreclosure sales in all 50 states, said on Monday it was partially lifting its own freeze.

Proia would not say when exactly GMAC lifted its suspension, but said it does not plan another suspension at this point.

The mortgage servicer expects the majority of foreclosure reviews in 23 states to be completed by the end of 2010, she said.

GMAC’s decision was first reported by the Wall Street Journal on Monday.

Source: Reuters

With the announcements from Bank of America [BAC  11.82   0.02  (+0.17%)   ] andGMAC that they have not found any major paperwork flaws and are resuming foreclosure sales next week, the threat of a nationwide foreclosure moratorium seems to be abating.

Granted, the administration never did call for that moratorium, and were actually pretty darned quiet throughout the past few weeks, but they did throw around a little tough language about investigating the banks and holding them accountable for any form of fraud. Then, on Sunday, the game began to change.

In a Huffington Post post, HUD secretary Shaun Donovan began shifting the conversation back to the housing market, ever so-slightly, tucking it in while still calling some foreclosure practices, “shameful.” Then yesterday we were informed of an “Administration-wide meeting with key federal agencies and regulators regarding the ongoing foreclosure processing issue.” Closed to press of course. The HUD Secretary, Treasury Secretary, folks from Justice and other top regulators are confabbing this morning, to what end, I really don’t know.

As a precursor, Secretary Donovan took to our air this morning and made a rather bold statement: “We are not finding any evidence of underlying structural issues that would make [mortgage] securitizations suspect or otherwise.” He stressed that banks need to be held accountable for any paperwork issues, but then he launched into his real message.

“Where we haven’t found issues, we need to make sure that homeowners that are sitting in limbo right now, waiting to buy homes, neighbors who are seeing houses sit vacant in their communities, that we move forward.”

Okay, so let’s get on with the housing recovery, which was obviously set back a bit by the foreclosure scandal. Oh, and let’s not forget, it’s not just about getting foreclosures back up for sale, it’s about going back to strong-arming those loan modifications, which, dare I say, the Administration hasn’t been too successful at to date.”

“I think the real issue that we’re focused on,” notes Donovan, “are banks doing what they are required to do by FHA and what they should be doing to keep people in their homes.” He used the words “recovery” and “confidence” several times in the interview, two things sorely lacking in today’s housing market and somehow forgotten in all the talk of robo-signers and multi-bajillion dollar mortgage put-backs.

By: Diana Olick
CNBC Real Estate Reporter

At the same time, 15-year fixed-rate loans and the five-year adjustable-mortgage rate both also hit record lows. Rates on the former were 3.62 percent, while the latter averaged just 3.47 percent.

Source: The Wall Street Journal, Nathan Becker (10/15/10)

The State is providing $100 million in tax credits to first-time home buyers. The credit will be allocated on a first-come, first-served basis using the date and time stamp on the fax submission, until the money is exhausted. The tax credit is available to those who purchased a qualified principal residence and did not own one during the last three years. This credit is five percent of the purchase price or $10,000, whichever is less. Taxpayers must claim the credit on their tax return in equal amounts over the following three tax years.

To apply, the buyer must complete and fax an FTB Form 3549-A, Application for New Home / First-Time Buyer Credit, along with the final settlement statement. It must be faxed to FTB within two weeks (14 calendar days) after the close of escrow. The fax number is 916.855.5577.

Taxpayers must receive a certificate of allocation from FTB to claim the tax credit on their California personal income tax return. FTB expects to send the allocation certificates over the next few months starting in August.

California homebuyers still have time to qualify for the state’s other $100 million home tax credit for the purchase of a new home. The New Home Credit is available for taxpayers who purchase (close escrow) a new home on or after May 1, 2010, and before August 1, 2011, as long as they enter into an enforceable contract executed before January 1, 2011. The seller must certify that the home has never been previously occupied.