California association blames housing woes on mortgage crisis

During the residential real estate boom times, home prices in California soared sky-high. Homeowners sat back and watched their homes double, even triple in value seemingly overnight.

Those days are over.

In another sign that the housing industry’s woes aren’t a quick blip, the California Association of Realtors last week announced that sales this September in the state dipped 38.9 percent from the same month last year. Sales dropped 14.9 percent from August of this year to September alone.

In even worse news, the association reported that the median price in September of an existing single-family home in California came in at $530,830, a drop of 4.7 percent from the $557,150 median price of one year earlier. This is significant because the drop marks the first such year-to-year decline in California in 10 years.

In a press release, the association’s president blamed much of the state’s problems on – surprise, surprise – the mortgage-lending crisis. The association said that California’s housing sales fell more sharply than those of the United States as a whole because the state relies so heavily on riskier jumbo loans. Loan officers make jumbo loans for borrowers who need to take out loans higher than $417,000.