Approximately 39,051 new and resale houses and condos were sold in the state of California last month. That is up 2.9 percent from 37,967 in April and up 18.3 percent from 33,024 for May 2008.  Sales have increased on a year-over-year basis the last eleven months. California sales for the month of May have varied from a low of 32,223 in 1995 to a peak of 67,958 in 2004, the average is 47,621.

The median price paid for last month on a home was $230,000, up 4.1 percent from $221,000 in April, and down 32.2 percent from $339,000 for May a year ago. Last month’s slight uptick is the result of a relative increase in sales of more expensive homes.

The REO sales have increased.  Of the existing homes sold last month, 51.1 percent were properties that had been foreclosed on. A year ago it was 39.8 percent.

The typical mortgage payment that home buyers signed into paying last month was $972.  This is up from $929 in April, and down from $1,633 for May 2008.  Adjusted for inflation, last month’s mortgage payment was 54 percent below the spring 1989 peak of the prior real estate cycle. It was 62.7 percent below the current cycle’s peak in June of ‘06.

The unique opportunitiespresented to first-time buyers, (including FHA loans, low down payment, favorable interest rates, the $8,000 tax credit from the housing stimulus package, and today’s low prices,) pushed sales during April of existing homes throughout the San Fernando Valley up 26.3% from a year ago.  This also forced down an already steadily shrinking inventory, the Southland Regional Association of Realtors reported.

The 691 single-family homes that were sold last month marked the tenth month in a row of sales increases.  “We’re seeing enromous activity from buyers,” said Ana Maria Colon, president of the Association.  “There simply are not enough homes listed for sale and every open house I visited recently had prospective buyers crawling all over them.  Most of these people represent a new generation of first-time buyers.”  Colon went on to say that these families would have been unable to buy a home without the help of these uniquie opportunities that are available right now. 

Colon and Jim Link, the Association’s chief excutive officer, said that virtually every transaction at or below the median price of $355,000 attracts offers from multiple bidders with some properties eliciting 30 offers or more, many of which are over list price.

With home prices at their most affordable in quite a number of years, has opened up homeownership to many who had been locked out during the housing boom.  Now the federal government, and many states as well, are launching plans to provide buyers of repossessed properties with some very attractive terms.  The governemnt is spending roughly 6 billion dollars to bolster the Neighborhood Stabilization Program.  These funds will be used to stop forclosures that often result in the urban decay we see around abandoned homes.

The money has only started to flow over the past few weeks, despite much of it being authorized last summer.  The funds will go to state and local housing authorities and non-profit organizations that are involved in providing housing for low-middle income families.  “The NSP was designed to help deal with all the properties in foreclosure around the nation,” said Antonio Reilly, executive director of the Wisconsin Housing and Economic Development Authority (WHEDA), which will administrate the program in several counties in the state.

Tom Kunz, President and CEO of Century 21 Real Estate LLC announced a very positive development for the real estate industry that was announced by the Business Roundtable, an association of chief executive officers of leading U.S. corporations. Specifically, the Business Roundtable’s Housing Working Group – which is chaired by Realogy CEO Richard A. Smith – issued a set of recommendations for the White House and Congress that are aimed at jumpstarting the housing market in order to stimulate a broader economic recovery.

The Business Roundtable’s recommendations are as follows:

· Keep mortgage interest rates at historically low levels (below 5 percent) for at least one year;

·      Expand the current First-Time Homebuyer Tax Credit incentive from the lesser of 10 percent of the purchase price of the home or $8,000 to a higher limit of either 10 percent or $15,000 for all homebuyers, remove the income restrictions and include all primary residence purchases for one full year;

· Conduct a thorough review of current foreclosure mitigation and loan-modification programs in light of rising loan-modification re-default rates;

·  Make permanent the current temporary conforming loan limits; and

Continue to review and strengthen government efforts already underway to review and refine mortgage lending practices.

“We believe targeted, demand-side solutions – such as the ones Business Roundtable is recommending today – will provide a critical next step for a housing recovery that will help create jobs and boost the economy as a whole,” said Smith in the Business Roundtable’s press release.

To obtain a copy of the Business Roundtable press release and its Housing Working Group’s detailed recommendations, click here. To read an article that appeared in today’s online edition of The Wall Street Journal containing an interview with Richard Smith about the Business Roundtable’s recommendations and why they are crucial to jumpstarting the housing market, click here.

Century 21 Real Estate LLC applauds the Business Roundtable for its proactive efforts to reinvigorate the U.S. housing market, and we are proud of the leadership role our parent company, Realogy, has taken in this regard. I know that many of our brokers and sales associates already have been involved in grassroots lobbying efforts in support of housing issues with your elected officials in Washington, D.C., and for that I commend you.

Please understand that the legislative process is often a long and winding road that is hard to predict, but at some point in the future, we expect to call on you to make your voices heard in support of any new legislation in Congress that would advance these recommendations. For now, just know that we appreciate your support, and we will communicate with you as these legislative opportunities occur.

Lawmakers are attempting to revive legislation in the Senate that would increase the now $8,000 tax credit for first-time homebuyers to $15,000 and also open up the program to all borrowers as well.

Senator Johnny Isakson, a Republican from Georgia, announced a bill today that would increase the tax credit to $15,000 and remove income and other restrictions on who can qualify.  Isakson said in a statement “One of the biggest problems facing the American people today is an illiquid housing market, a decline in their equity, a decline in their net worth and a depression in the housing market that we are obligated to correct if we possibly can.”  Isakson said his legislation would spur demand in the housing market by giving homeowners the incentive to trade up to a more expensive home.

The legislations is co-sponsored by Senate Banking Committee Chairman Christopher Dodd, a Conneticut Democrat, would extend the homebuyer credit to multifamily properties used as a borrower’s primary residence.  The income caps of $75,000 and $150,000 would also be eliminated on individuals and couples seeking to claim the credit.

This bill would also extend the tax credit, which now expires on Dec. 1, 2009, to one year after the new measure is signed into law.

For the third consecutive month, record low mortgage interest rates boosted pending home sales.  The first-time buyer tax credit has aided in this boost, according to a report from the NAR.  Their Pending Homes Sales Index, a forward-looking indicator based on contracts signed in April, rose 6.7 percent to 90.3 from a reading of 84.6 in March, and is 3.2 percent above April 2008 when it stood at 87.5.

NAR Chief Economist Lawrence Yun stated “Housing affordability conditions have been at historic highs, but now the $8,000 first-time buyer tax credit is beginning to impact the market.  Since first-time buyers must finalize their purchase by November 30th to get the credit, we expect greater activity in the months ahead, and that should spark more sales by repeat buyers.”