A major consequence of the housing market crisis was a significant decline in home prices as foreclosures intensified between 2007 and 2008. One of the hardest states hit was California. The median price of a new home in California decreased by 35.3 percent from August 2007 to August 2008. Interestingly, the quantity of homes sold was 13.6 percent higher in August 2008 than in August 2007.

What was the price elasticity of demand for homes in California in the period under examination? Can homes in California be classified as inelastic, unit elastic, or elastic?