Prices plummeting in California

During the housing boom that started in 2001, homes throughout California soared in value. For a while, it seemed that prices in the Golden States would never stop rising.

Then the housing slump came. And California is now suffering more than any other state.

A recent Associated Press story, written by reporter Alex Veiga, said that the median price of a home in California plummeted 30 percent in May. That, according to DataQuick Information Systems, is the largest fall in at least 20 years.

There is a sliver of good news for real estate professionals in California. The dropping prices have spurred an increase in home sales. And why not? Buyers can now get some terrific bargains.

In fact, this is what much of the real estate industry is hoping will finally happen in the rest of the country. As housing prices fall, they hope, buyers will finally stop waiting and begin snatching up the bargains.

It hasn’t happened yet, which is why housing sales are down across the country. But if California is any indicator, maybe the great buying frenzy will start before too much longer.