by Calculated Risk on 4/13/2006 02:17:00 PM

From the Contra Costa Times: State's housing market retreats. The Contra Costa Times excerpts from a new Wells Fargo report on the California economy.


Click on graph for larger image.

Wells Fargo provides this graphic of unsold inventory in California by county. The caption reads:

California housing inventories can no longer be considered lean. Orange County and San Diego appear most at risk for near-term home price deceleration.

From the Times article:

The housing market in California has fallen into a visible slump, and the downturn could erode economic expansion in fast-growing regions such as the East Bay, economists warned Wednesday.

Existing home sales have skidded, houses now languish on the market for longer periods, and the rate of home building has slowed, according to the report issued by Wells Fargo Bank.

...the Wells Fargo economic study warned of a chill for real estate.

"California housing market conditions have noticeably deteriorated since September," Scott Anderson, Wells Fargo senior economist, wrote in his report.
...
"The California housing market may have skipped a beat, but the patient is not dead yet," Anderson stated in his study. "The decline so far appears manageable for the industry as well as for the California economy."

Still, some of the recent trends in housing portray a sector in retreat from the white-hot levels of the last years:

• Existing home sales statewide "plunged" in November, with an 11.2 percent decline; in December, with a 17.6 percent drop; and in January, with a 5.9 percent setback, Wells Fargo reported, citing data released by the California Association of Realtors.

• Unsold inventories of detached houses rose to 6months in January, far above the 3.2 months that houses remained unsold in January 2005.

• Statewide housing permits have drooped 11 percent below last year's pace.

• Median prices have been "nearly flat" in the last six months, although they remain 13.8 percent above the levels of a year ago.