Wednesday, April 9, 2008
March worst month yet for housing market
That is a headline from the North County Times in Sand Diego. While we are hearing about an uptick in sales and more buyers in the market the numbers for March don't reflect this (at least in San Diego). As you can see in the article, March sales are normally about 40% better than Feb. This year they were just 9% better.
Here's some highlights from the article,
Despite relatively high February home sales and real estate agent reports about a swarm of buyer activity, North County's housing market hit a new low in March.
Weakness in the housing market cut across all indicators, according to a report issued Tuesday by the North San Diego County Association of Realtors. Here are other key points in the report, which is known as HomeDex:
-- North County home sales posted the biggest year-over-year drop since the start of the housing recession.
-- The area's median sales price, where half the homes sell for more and half for less, continued to take a beating and also showed the largest annual decline yet. In March, it dropped below $500,000 for the first time since 2003.
Sales tumbled 37 percent from a year ago to 484 sales, a stark contrast from February, which posted a 12 percent year-over-year drop in sales.
The median sales price in North County for last month fell 23.4 percent from a year ago to $490,000, the biggest year-over-year decline in price recorded during this recession. Adjusted for size, though, the median price has fallen 16.1 percent to $255 per square foot.
And prices are likely to fall further because many analysts consider the 11 months it would take to sell of all active listings in the region a deep buyer's market.
While slightly down from February's inventory of 12 months, last month's inventory is still almost double that of a year ago, when March inventory stood at 6 months. And last year, March inventory was 35 percent lower than February's while the inventory fell just 6 percent this year from February.
I wonder how the IE did?
Actually I think I know how some of the IE did (closed sales). Some areas saw decent increases, these were the low end areas where the prices have already plummeted. Moreno Valley for instance saw 152 sales this March vs only 101 last year. Many other cities though look to be well below last year. Riverside was 171 vs 225 last year, Fontana 86 vs 130 last year, San Berdu 79 vs 121 last year. These are closed sales though and reflect homes that sold in Dec, Jan and Feb.
Most of the sales these days are in the low end. This is the main reason the median price is plummeting. The number of high end sales (over $600k) has fallen to a trickle. The primary reason for this is that the high end market is driven my move up buyers. These days most of the low end homes are sold by banks. Banks are not move up buyers! No move up buyers means the high end is dying on the vine. The higher lending standard are also taking a larger hit on the high end market than they are at the lower end.