California housing market turns corner

California, one-time hub of subprime-mortgage lending and the nation's leader in home foreclosures, has turned the corner toward a housing recovery, according to the state Association of Realtors.

Single-family home prices in California rose for the eighth consecutive month in October. The median cost of an existing, detached house gained 0.3 percent from the previous month to $297,500. Prices dropped about 3.2 percent from a year earlier, compared with annual declines of 7.3 percent in September and 17 percent in August.

"California has hit and passed the bottom of this real-estate cycle," said Leslie Appleton-Young, vice president and chief economist of the Los Angeles-based Realtors group.

Sales of existing houses climbed 1 percent in October from a year earlier, the group said. The state is on pace to record 562,400 sales in 2009, based on the rate of transactions last month. Foreclosures represented 41 percent of sales, down from a peak of 59 percent in February, research company MDA DataQuick said in November.

Home sales throughout the U.S. are being boosted by a drop in interest rates and a federal tax credit for homebuyers.

The median single-family house price in California is 50 percent below the peak of $594,530 reached in May 2007, the group said.

Dangers still facing the state's housing market include unemployment and the end of the federal tax credit next year, said Appleton-Young.

The median time it took to sell a California house fell to 34.1 days in October from 45.5 days a year earlier, the group said.

The association's index of unsold inventory dropped to a four-month supply from 6.1 months a year earlier.

The index shows the time needed to deplete the supply of homes on the market at the current sales rate.

The median price for a California condominium was $267,520, down 3.6 percent from a year earlier and 1 percent from September, the group said. Condominium sales rose 9.4 percent from a year earlier and 5.5 percent from September.