Sales Of Million-Dollar Homes Drop In CA

This is the fourth year in a row that such sales have dropped.

Sales were down about 24% in 2009 compared to 2008.

Many people who want to sell their expensive homes are holding back because the market is so weak right now. Mortgage financing is difficult to come by. Home values are down, dropping many homes below $1 million.

The Golden State is no longer so golden. This is another sign of California's economic woes. No turnaround is in sight.

The Los Angeles Times says:

"Prestige home sales are a unique sub-category of the real estate market. The buyers and sellers respond to a different set of motivations," DataQuick President John Walsh said. "In the multimillion-dollar price ranges, decisions are largely discretionary and aren't as dependent upon jobs, prices and interest rates the way they are for most buyers and sellers."

The trend underscores the nature of the state's housing recovery. Sales of California homes at all price levels increased 16.9% last year, to 460,166 from 393,703 in 2008. One in 25 homes sold for $1 million or more last year. The year before it was 1 in 16.

Lower-end homes largely fueled last year's buying spree as investors and first-time purchasers sensed opportunity in steeply discounted foreclosure properties across the state.

The Federal Housing Administration, which insures mortgages often used by first-time buyers with small down payments, has played a big role in supporting the market for lower-end properties in California and some move-up markets.