First-Time Buyers Dominate California Market in 2009

Nearly half of all purchasers who bought existing homes in California last year were first-timers, according to a report by the state's realty professionals. At 47%, the share of rookie buyers was the highest since 1995, when half of all buyers were first-timers, and exceeded the long-run average of 38.6%, the California Association of Realtors study found. "It is clear that the federal tax credit for home buyers worked well in 2009 and is continuing to drive home sales," said CAR president Steve Goddard. "The credit is arguably the most successful strategy employed by the government to stimulate the economy." Nearly 40% of last year's buyers said they would not have purchased a home without the credit. Statewide, meanwhile, almost half the deals last year were distressed sales, up from 35.6% in 2008. Lower prices improved affordability ratios for buyers, but they cut heavily into sellers' profits. Indeed, a third of all sellers last year sold their properties at a loss. That's the highest percentage since CAR started tracking net cash losses in 1989, and well above the long-run average of 9.3%. It also was the fifth consecutive year that the number of losers increased, the association reported. On a more positive note, the median price in the Golden State hit bottom in February 2009 at $245,170. Since then, the median home price has increased steadily in month-to-month comparisons. Still, the median remained below 2008 levels throughout 2009. The annual median price is projected to increase this year by $9,000 to $280,000.