Southern California home sales held at a three-year low last month amid a sluggish move-up market and record-low sales of newly built homes. The median sale price fell year-over-year by the largest amount in 20 months as buyer uncertainty, tight credit and lackluster hiring continued to restrain housing demand, a real estate information service reported.
A total of 18,394 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in May. That was up insignificantly – 0.3 percent – from 18,344 in April, and down 17.4 percent from 22,270 in May 2010, according to San Diego-based DataQuick. May marked the 11th consecutive month in which sales fell year-over-year.
On average, sales between April and May have increased 5.7 percent since 1988, when DataQuick's statistics begin. May sales have varied from a low of 16,917 in 2008 to a high of 35,557 in 2005. Last month’s sales count was 29.0 percent below the May average of 25,902. May sales were lower than last month in just three of the past 23 years: 2008, 1995 and 1993.
The 1,152 newly built homes that sold across the Southland last month marked the lowest new-home total for the month of May since at least 1988.
“A year ago we were talking about sales reaching a four-year high as buyers rushed to take advantage of expiring federal homebuyer tax credits. Now sales are stuck at a three-year low. The government stimulus is long gone and some of the fundamental drivers of housing demand have yet to strengthen enough to lift sales to even average levels. Some of the key culprits are weak job growth, tight credit and a hesitancy among potential buyers and sellers, who question whether this is the best time to make their move,” said John Walsh, DataQuick president.
“So here we sit in the market doldrums,” he continued. “Two of the more likely sources of fresh wind in the market’s sails would be a pickup in hiring or further home price reductions.”
The median price paid for all new and resale Southland houses and condos purchased last month was $280,000, the same as in April but down 8.2 percent from $305,000 in May 2010. That year-over-year drop was the largest since the median fell 10.9 percent in September 2009. he typical monthly mortgage payment that Southland buyers committed themselves to paying was $1,154 last month, down 2.3 from $1,181 in April and down 10.8 percent from $1,293 in May 2010. Adjusted for inflation, current payments are 50.0 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 59.0 percent below the current cycle’s peak in July 2007. Indicators of market distress continue to move in different directions. Foreclosure activity remains high by historical standards but is lower than peak levels reached over the last two years. Financing with multiple mortgages is very low, and down payment sizes are stable, DataQuick reported.
| | Sales Volume | Median Price | ||||
| All homes | May-10 | May-11 | %Chng | May-10 | May-11 | %Chng |
| Los Angeles | 7,320 | 5,983 | -18.30% | $345,000 | $320,000 | -7.20% |
| Orange | 3,257 | 2,664 | -18.20% | $450,000 | $425,000 | -5.60% |
| Riverside | 4,164 | 3,644 | -12.50% | $210,000 | $197,000 | -6.20% |
| San Bernardino | 2,835 | 2,323 | -18.10% | $160,000 | $150,000 | -6.30% |
| San Diego | 3,879 | 3,087 | -20.40% | $340,000 | $324,500 | -4.60% |
| Ventura | 815 | 693 | -15.00% | $380,000 | $360,500 | -5.10% |
| SoCal | 22,270 | 18,394 | -17.40% | $305,000 | $280,000 | -8.20% |
7 comments:
Informing post, thanks for posting.
man with van in London
planning on moving to the murrieta/temecula area late next year or early 2013 - what are your prospects for where the market might be at that time?
With the rental ratio's and price to income ratios pretty much back to normal in the IE, I think the prices should be fairly stable out here now. Obviously factors such as employment and the economy in general could drive prices down but I just don't see anymore big price swings our here in the IE. It's cheaper to buy than it is to rent in most areas and that alone should solidify the prices. But on the flip side, I don't see prices going up either. There are still far to many negative factors at play to figure on any appreciation in the near future.
And a lot will do with how easy (or not) it is to get a loan. If the down payment requirements get raised that will negatively affect prices as it will limint the number of buyers. Also the conforming loan limit is set to drop to $365k I beleive, so that may put more pressure on the higher end homes.
my budget is likely going to be right in the $200k-$250k range, maybe a little more. i see some of the homes that are available now in that range and have seen quite a few to my liking - my main concern is the price going back up before my move and getting me much less for that $250k than i would if i were moving today.
if that were to become a possibility (or even a likelyhood), i'd have to start looking at purchasing a home earlier and carrying two mortgages until i can sell my current home in october 2012 (that's my cutoff date - before that i would have to pay back the first time homebuyer credit, something i'm not prepared to do).
of course, i'd also like to be able to get closer to the coast, but i know as of right now $250k won't get me very much there...
Well, none of us has a crystal ball but I'd certainly bet a paycheck that prices won't be any higher in a couple of years. Another option if you can swing it is to keep your current home and turn it into a rental. Who knows you might even make a few bucks. Not an option if you have equity and need it for the new place though.
Such a great informative post..
Thanks for sharing with us..
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