For the first time in several years, the median home price for the California housing market has dropped below $500,000. And the grim news doesn’t stop there: Sales fell 40% in October, according to the California Association of Realtors.
The 10 percent overall drop in the median price was best reflected in Los Angeles, where the median home price dropped 8.6 percent. However, as the Haute Blog mentioned on a November 26 blog entry (“High-priced homes make for most reliable investments”), it is the homes that are above the median price that are not feeling a negative effect whatsoever. That group features pricey SoCal locales such as Beverly Hills, as well as the San Francisco area, where the market in general appears to be on a continuous growth pattern.
Perhaps most startling is that the cutoff for a jumbo loan remains at $417,000 – where it has been since 2006, and where the Office of Federal Housing Enterprise Oversight has decided to leave it, unchanged, for 2008.
While this means loans will be difficult to finance, this should be no problem for the upper-class purchasers of luxury homes in California.