Wednesday, August 19, 2009
DataQuick reported on July real estate sales in Southern California and it seems that a sales mix including more higher priced homes is doing wonders for median prices.
By the looks of the graphic above, you'd think that housing prices have reached bottom and are now destined to march back up to 2007 levels after that nasty interlude of 2008.
To their credit the folks at DataQuick were quick to put the most recent sales price data into perspective, spilling a fair amount of digital ink in explaining how a changing sales mix can make the median rise when maybe prices really aren't rising.
Across the Southland, resales of single-family houses priced $500,000 and above rose to 20.1 percent of all existing houses sold in July, compared with a low this year of 15.0 percent in March. However, a year ago 27.2 percent of sales were for more than $500,000.On a year-over-year basis, home prices in Orange County are now making a beeline back to zero, a concept that, after more than four years of updating these charts is quite foreign.
The recent shift toward more sales of higher-cost homes, in conjunction with the decline in sales of deeply discounted foreclosures, has put upward pressure on the median sale price. The median is the point where half of the homes sold for more and half for less. The dramatic declines in the median over the past two years were partly the result of the high-end housing market all but shutting down, just as resales of low-cost, inland foreclosures exploded.
Since Marshall "almost all if not all of those gains are here to stay" Prentice is now retired, new DataQuick President John Walsh once again provides the monthly commentary:
Have prices hit bottom? While some data continue to hint at that, it remains an especially risky call to make given the uncertainty over the magnitude of future job losses and foreclosures. The recent drop in foreclosure resales, coupled with the rise in high-end sales, has helped stabilize some of the regional home price measures. But there’s still quite a bit of distress out there, and plenty of unknowns with regard to how lenders and borrowers will choose to proceed.Well done.
Even if we are at or near bottom, history suggests we could bounce along that bottom for quite a while.
Peter Hong has more in this LA Times piece including a number of anecdotal accounts of bidding wars that appear to be moving upscale toward the half million dollar price range.