Lawrence Yun, NAR's chief economist downplayed the damage a bit. According to him, customers rushed into deals to claim the credit, borrowing from May sales. Once the economic recovery comes into full swing, housing markets will heat up. Those conditions include much lower home prices and extremely favorable mortgage interest rates. The question is when -- or if -- the job market will ever bounce back. "We're not creating jobs," said Larson. "The housing problems now are being driven by broad economic problems.
California new and existing home sales totaled 33,176 in September, down 17.5% from a year ago and 3.1% from the previous month, according to the San Diego-based real estate provider DataQuick. Despite record low mortgage rates, the entire housing market is still waiting for new demand to replace the boost from the homebuyer tax credit that expired in April. While transactions are down, prices are still up for the 11th month in a row, following more than two years of straight declines. The median price on a California home was $265,000, a 5.6% increase from last year and a 1.9% bump from the previous month. The trough came in April 2009 at $221,000. The peak was $484,000 in early 2007. Of the existing home sales completed in September, 35.8% were properties that had been foreclosed on in the last year, down from 41.7% a year ago and flat from the previous month. Foreclosure accounted for more than 58% of the market in February 2009, the all-time high. Homeowners made an average $1,055 monthly payment in September, down more than 60% from the peak in June 2006.