California’s housing market, suffering from a slump in single-family home and condominium sales, will “stay tough for quite some time,” KB Home Chief Executive Officer Jeffrey Mezger said, Bloomberg News reports.
“I think it’s going to take quite some time for the inventory to clear,” said Mezger, whose Los Angeles-based company is the fifth largest U.S. homebuilder by sales. He spoke today during a panel discussion at the Milken Institute State of the State Conference in Beverly Hills, California.
California home sales last month plunged 39 percent and the median price for existing houses and condominium units fell 4.7 percent, the California Association of Realtors said last week. KB Home, which has lost almost half its market value this year, last month reported a third-quarter loss of $35.6 million on costs to abandon land purchases.
The slump in home sales in California is being exacerbated by the decline in credit availability, especially for those seeking mortgages of more than $417,000, also known as jumbo loans, following the collapse of the subprime mortgage market, Mezger said. The median price of an existing, single-family, detached home in California was $530,830 in September, according to the state’s realtors association.
