Now It's Getting Interesting

As promised, the charts for Southern California real estate sales have been updated based on the DataQuick report for May that was released yesterday. We'll soon be headed to the mountains - look for the next post sometime early next week.

Historically, May is a very strong month for both sales volume and price appreciation, but that was not the case last month - it really is starting to get interesting now, as high interest rates, high inventory, and lower sales volume put more pressure on prices.

About the only positive comment that DataQuick could muster regarding the 27,286 new and resale homes sold in May contained a rare typo:

While last month was the slowest May since 1999 when 25,404 homes were sold, sales were still above the May "average" May of 24,857 (going back to 1988). The strongest May was in 2002 when 32,391 homes were sold, the slowest was in 1993 when 15,001 were sold.

That is, unless "May "average" May" has some special meaning to those in the real estate business that is not obvious to others. When looking at the median prices by county, the much hoped for "leveling off" in prices can be clearly seen in recent months - the real question is what happens next?

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When looking at the trend in the year-over-year price change, a completely different picture emerges. Four of the six counties now show single digit annual increases with Los Angeles County now barely above that mark. San Diego appears once again headed for negative territory in the coming months, but it has shown a miraculous knack for staying above zero on the y-axis going back almost a year now.

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The year-over-year price change in Ventura County, where this blog originates, has been dropping like a rock in recent months, now registering only a three percent annual increase. The local paper reports that this is due to the mix of homes sold, and that it should be closer to seven percent.

It will be interesting to read the commentary in the months ahead if current year-over-year trends continue - looking at the first chart, the median sales price in Ventura County is down over six percent from its peak last fall with what is shaping up to be a difficult summer for sellers.

Take a look at your local Realtor.com listings and it's easy to spot the motivated sellers - they're the ones with prices $30-$40K below all the others. In an environment where the number of sales continues to slow dramatically, it is the motivated sellers that determine where the real estate market goes.