One of the country's largest trade organizations, the California Association of REALTORS® has just released its 2000 California Housing Finance Survey (HFS.) with few surprises, except how such a dotcom rich state is managing to have affordability issues while the rest of the country is slowing down, and housing prices are starting to drop.

The affordability index is so low in California that buyers are looking to the condominium market as an affordable alternative to a single-family home, says the HFS.

"Higher home prices and affordability concerns increased the sales of smaller single-family detached homes and pushed some homebuyers, especially at the lower and moderate end of the market, into lower-priced condominium alternatives," said C.A.R. President Gary Thomas. "Overall, sellers have reaped the rewards of the robust real estate market, pocketing a median net cash gain of $80,000 -- up 23.1 percent compared to 1999."

The detailed study also reported that the median time on the market and the price discount remain at record low levels. The typical California home sold in 2000 was on the market for four weeks, half the eight-week period of three years ago and the shortest time on the market since 1989. In 1995, the median time on the market was 11.5 weeks.

"Throughout 2000, demand for residential real estate remained high, driving prices skyward and keeping inventory low," said Leslie Appleton-Young, C.A.R.'s vice president and chief economist. "One indicator of the underlying strength of the residential real estate market is the historically low median price discount on California homes.

"The price discount, representing the percentage difference between the initial asking price and the final sales price, was only 0.5 percent in 2000, down from 1.7 percent a year ago," she said.

Additional key findings of C.A.R.'s 2000 California Housing Finance Survey include:

Published: December 7, 2000

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