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SoCal real estate sales for April
Wednesday, May 16, 2007
Yesterday, DataQuick reported on Southern California real estate sales for the month of April. Sales volume hit lows not seen since 1995 - if any of you were around here at that time, you'll remember what things were like back then. Not good.
Though prices remain relatively stable, sales volume in the Inland Empire counties of Riverside and San Bernardino are declining rapidly - last to the party, first to leave it appears.
Click to enlarge
With builder incentives and similar enticements by homeowners looking to snare one of the dwindling number of willing buyers, it's fair to say that home prices have declined more than is shown in the chart below. Also, the steep decline in sales volume in more affordable areas tends to push the median price up.
But probably the most important factor in the relative stability of home prices is that some people are still paying 2005-2006 prices when they really don't have to. If you're a seller, it must be kind of like hitting the lottery when you get a qualified buyer in 2007 who has heard nothing about a "housing bubble" - they fall in love with your house and they think they're getting a bargain at $15,000 off the asking price.
Click to enlarge
As shown below, there are now four counties with year-over-year price declines in the most recent report. Long-time sub-zero dwellers San Diego and Ventura County rebounded but remained in negative territory in April - they were joined by both Orange County and Riverside County with slight declines.
This is the first time that four counties have posted year-over-year declines since, well, probably 1995.
Click to enlarge
With sales volume at these levels and continuing to trend downward, the stand-off between buyers and sellers will probably be resolved over the next few months. Current odds do not favor the seller.
7 comments:
Here in Silicon Valley, I listen to radio station KLIV on my way home and they just reported that the DQ numbers for the valley show a new record high median price, but YOY volume down over 20%. It confirms what I am seeing locally: houses sell in a few months instead of a few weeks, but still at top dollar. A few months ago, 3 houses went up for sale on my block, a 15 year old development. All three have recently sold for their original asking prices, over $500 per square foot, the signs are now down, and the new neighbors are in. I've been bubblesitting for over two years, and even though the pressure is high from the wife and from society to buy, I simply won't do it until buying saves money over renting, and I no longer expect that to happen anytime soon. "Current odds" notwithstanding, housing seems to be defying logic, reminding me of that old saying, "markets can remain irrational longer than you can remain solvent."
anony above,
the valley has been on a different time table than the rest of Calif, and US as for its property values.
I think it follows the stockmarket closer. The avalability of jobs there seem to be directly related to the stock market. Also with increased stock prices, there is more available money from stock options.
Although the subprime crunch will hit everything, as long as the stockmarket is healthy there will probably be demand in the valley for housing.
Here in SLO county, my house that was appraised at $796k in August 2006, just appraised in Apr 2007 at $740k. Doesn't bother me much, since I bought in 2000 for $385k. But it's kind of sobering to know that I'm $50k poorer than I was 9 months ago.
Sonoma county is down 7% over last year, with now 10 consecutive months of media home price declines. This has not been seen since 1992-1993.
Sales volume is down for the 19th consecutive month. It appears we'll doing a crash "revert to the median" thing here. I'm still in the black over a purchase price of four years ago ... so far.
Tim, appreciate the time you take to update the SoCal housing data charts and hope you continue to do so after you make the move up north.
Thanks a bunch!
I wonder how many Bay Area folks liberated their equity to buy investment homes in Central Valley, Arizona, Nevada, etc. Those homes are not going to appreciate or sell for a long time and should become significant albatrosses around the necks of previously freewheeling spenders. Will that start having an affect on the local economy?
Here in Silicon Valley, I listen to radio station KLIV on my way home and they just reported that the DQ numbers for the valley show a new record high median price, but YOY volume down over 20%.
The high median price in this case means mainly high-end houses are selling. This makes sense because high prices and tightened loan standards are shutting down most first-time buyers in the lower priced markets. But without first-time buyers, there's no one to pick up the cast-offs. The food chain is broken, the plankton are dying off. The few home buyers trading up are now are in the last round of musical chairs.
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