Tuesday, April 13, 2010

March numbers

Dataquick posted the March numbers today. SoCal overall is looking ok but the IE is still struggling. The number of sales in Riverside county took a pretty good dive from last year. That's a little surprising although could be attributed to the lack of sale-able inventory. The price remained about the same as last month, no surprise there. The percentage of foreclosure sales are really dropping off but the slack is being taken up by short sales which they don't track. So most of the sales are still distressed properties. Another surprising number was the FHA sales. Nearly 40% of the sales were FHA. That's not a healthy sign since most FHA buyers are marginal buyers at best. There's a much higher chance of a default with an FHA buyer (another wave of future foreclosures?) Another 27% of the purchases were all cash. Those are primarily investors and flippers. That's also not a good sign for those looking for a normal market.

So while the number look good on the surface the other data is telling a different story. FHA buyers, flippers and distress sales are most of the market. And that market is not a healthy market.

A total of 20,476 new and resale homes sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was up 33.3 percent from 15,359 in February, and up 5.0 percent from 19,506 in March 2009, according to MDA DataQuick of San Diego.

Sales always go up from February to March. Last month was the 21st in a row with a year-over-year sales increase. The March sales average is 24,936 going back to 1988, when DataQuick’s statistics begin.

“It’s a reflection of just how grim things got, that we’ve now had almost two years of sales gains and we’re still 18 percent below the sales average. The market won’t rebalance until mortgage lending patterns normalize, and that’s just not happening yet. Some of the best deals out there right now are happening when the buyer comes in with cash,” said John Walsh, MDA DataQuick president.

The median price paid for a Southland home was $285,000 last month, up 3.6 percent from $275,000 in February, and up 14.0 percent from $250,000 for March 2009.

The median peaked at $505,000 in mid 2007 and appears, so far, to have bottomed out at $247,000 in April last year. The peak-to-trough drop in the median was due to a decline in home values as well as a shift in sales toward low-cost homes, especially foreclosures.

Foreclosure resales accounted for 38.4 percent of the resale market last month, down from 42.3 percent in February, and down from 54.8 percent a year ago. The all-time high was in February 2009 at 56.7 percent.

Meanwhile, Uncle Sam continues to prop up lending for many low-to mid-priced homes. Government-insured FHA loans, a popular choice among first-time buyers, accounted for 38.6 percent of all mortgages used to purchase Southland homes in March.

Absentee buyers – mostly investors and some second-home purchasers – bought 21.3 percent of the homes sold in March.

Buyers who appeared to have paid all cash – meaning there was no indication that a corresponding purchase loan was recorded – accounted for 27.1 percent of March sales. In February it was a revised 30.0 percent – an all-time high. The 22-year monthly average for Southland homes purchased with cash is 13.8 percent.

The “flipping” of homes has also trended higher the past year, though it eased a bit in March. Last month the percentage of Southland homes flipped – bought and re-sold – within a three-week to six-month period was 3.2 percent of total sales, down from 3.5 percent in February but up from 1.6 percent a year ago. Last month flipping varied from as little as 2.6 percent of total sales in Riverside County to as much as 3.9 percent in Los Angeles County.

All homes Mar-09 Mar-10 %Chng Mar-09 Mar-10 %Chng
Los Angeles 5,971 6,747 13.0% $300,000 $329,000 9.7%
Orange 2,433 2,652 9.0% $385,000 $432,000 12.2%
Riverside 4,409 4,156 -5.7% $187,000 $198,000 5.9%
San Bernardino 2,897 2,955 2.0% $150,000 $152,000 1.3%
San Diego 3,020 3,227 6.9% $285,000 $330,000 15.8%
Ventura 776 739 -4.8% $326,000 $375,000 15.0%
SoCal 19,506 20,476 5.0% $250,000 $285,000 14.0%

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