The market crisis has been a hard blow to all of the nation, however the one must damaged has been California. It has suffered a huge quantity of foreclosures and avalanches in home price values. Based on data complied by the California Association of Realtors, CAR, their median price for single-family homes in February, lowered 41% from that of last Feb., banking at $247,590. Home construction is also almost non existent. The National Association of Home Builders reported that housing permits in December were almost a quarter of their previous total at the height of the market.

However, it seems there may be hope that the market in California is slowly starting to come around. Sales volume is beginning to increase as the low prices seen there, those 40-60% less then what they should be, are really attracting buyers. CAR reported that in Feb. over 600,000 homes were purchased, which is 80% more then that bought in Feb. of 2007. Says, the chief economist for CAR, Leslie Appleton-Young, "The sales rebound is largely centered around areas that have experienced the biggest impact from the subprime crisis,". Investors play a big factor in the buying increase, as the low prices make buying single-family homes in bulk, particularly attractive for them.

In other good news, their existing home inventory is now resting at 6.5 months, which is lower then the 15 months that was registered a year ago. Appleton-Young, remarked that "Typically, I would describe a normal market as having a six to seven month supply of homes,...We have that now." This puts California comfortably in with the other states, as the NAR reported a median of a 9.7 month supply. The only factor that may skew California´s data, is that the banks have yet to put many of their repossessed homes on the market as they don't want to crash the market. However, this is not seen to be much of a problem as investors and buyers will be sure to jump on those once they enter the market.

As far as the predicated outcome for California, it is still believed that prices will continue to decline for awhile yet, but Nicholas Restsinas, the director at Harvard´s Joint Center for Housing Studies, feels that there will be, "a slowing of that decline, which portends the end of price drops." Appleton-Young, predicated an overall loss of 19% for this year, but said that she thought "we could see home price stabilization by early next year,". Restsinas also likened California as a guide for the rest of the nation, "California was the pace setter for lots of the mortgage products that went toxic,...The sense is if the problems can be addressed there, the rest of the country will follow."