Tuesday, February 15, 2011

January sales report

The January dataquick report is out. Sale numbers fell off a cliff, that's fairly normal though this time of year. Median price fell nearly everywhere. The IE was only down a small amount since we are much closer to the bottom than the OC or LA. I suspect that the OC and LA will start to see some large declines now. This mirrors the pattern of the early 90's where the IE fell hard and fast while the coastal areas thought they were "immune" because everyone wanted to live there. Not so much as it turned out. They fell just as far as the IE, it just took them a couple of extra years.

Southland homes sold at the slowest pace for a January in three years – and the second-slowest in 15 – amid record-low new-home sales, tight credit, and a persistent reluctance among would-be buyers. The median sale price dipped slightly from a year ago but fell more than usual from December as investors and others targeting lower-cost properties accounted for a larger share of sales, a real estate information service reported.

The total number of homes sold last month was the lowest for a January since 2008, when 9,983 sold, and the second-lowest since 1996. Last month’s sales fell 18.8 percent below the average January sales tally of 17,802.

January new-home sales were the lowest for any month in DataQuick’s records back to 1988. Builders have struggled to compete with prices on resale homes, especially distressed properties.

But what’s proven the bane of the building industry has fueled a boom among investors, who appeared to be as active as ever last month.

Absentee buyers – mostly investors and some second-home purchasers – bought a record 24.8 percent of the homes sold in January, paying a median $198,500. Over the last decade, absentee buyers purchased a monthly average of about 16 percent of all Southland homes.

Buyers who appeared to have paid all cash – meaning there was no indication that a corresponding purchase loan was recorded – accounted for a near-record 29.5 percent of January sales, paying a median $190,000. So far, the peak for cash sales was 30.1 percent last February. The 10-year monthly average for Southland homes purchased with cash is about 13 percent.

“Last month was sort of a flashback to January last year: Sales were lousy, but many investors and others looking for bargains stayed active. They kept working the distress-heavy, lower-cost markets through the holidays, which translated into a relatively high level of investor and cash deals closing last month. It helps explain the larger-than-usual, month-to-month dip in the median sale price,” said John Walsh, DataQuick president.

Last month 14,458 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. That was down 26.0 percent from 19,528 in December, and down 5.9 percent from 15,361 in January 2010, according to DataQuick Information Systems of San Diego.

The median price paid for a Southland home last month was $270,000, down 6.9 percent from $290,000 in December, and down 0.6 percent from $271,500 in January 2010. It was the median’s lowest level since it was $268,000 in July 2009. Last month’s year-over-year decline in the median was the first since October 2009, when the median fell 6.7 percent, to $280,000.

The median’s low point for the current real estate cycle was $247,000 in April 2009, while the high point was $505,000 in mid 2007. The peak-to-trough drop was due to a decline in home values as well as a shift in sales toward low-cost homes, especially inland foreclosures.

The typical monthly mortgage payment that Southland buyers committed themselves to paying was $1,128 last month, down from $1,205 in December and down from $1,170 in January 2010. Adjusted for inflation, current payments are 49.8 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 58.9 percent below the current cycle’s peak in July 2007.

All homes Jan-10 Jan-11 %Chng Jan-10 Jan-11 %Chng
5,228 4,908 -6.10% $325,000 $300,000 -7.70%
Orange 1,867 1,929 3.30% $425,000 $415,000 -2.40%
Riverside 3,162 2,738 -13.40% $195,000 $190,000 -2.60%
San Berdu
2,252 2,085 -7.40% $150,000 $151,500 1.00%
San Diego
2,322 2,248 -3.20% $305,000 $304,000 -0.30%
Ventura 530 550 3.80% $360,000 $350,000 -2.80%
SoCal 15,361 14,458 -5.90% $271,500 $270,000 -0.60%


FairEconomist said...

[Typical purchased house payments] are 58.9 percent below the current cycle’s peak in July 2007.

That really says something about how crazy prices were in 2007, and how dumb a move it was to buy near the peak.

I'm in the OC and I agree prices are due to drop here, considerably.

golfer_X said...

The YoY decline in the OC isn't that bad but if you look at the decline in median over the last few months it's a lot more significant. Nov was $435k and Jan is $415k. That's 2.5% a month. Who knows if that trend will hold, get better or get worse. But with the OC only approx 40% off peak it seems logical to assume it's got a way to fall still.

paula said...

Thanks for sharing the updates.

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