Real Estate Recovery in So. California: Home Sales Increase 16th Straight Month, Prices 6th Month
Southern California home sales rose in October as prices showed more signs of firming. The median sale price fell by the smallest amount in two years, the result of a shrinking inventory of homes for sale and government and industry efforts to stoke demand and curtail foreclosures. Last month 22,132 new and resale houses and condos closed escrow in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. That was up 2.8% from 21,539 in September and also up 2.8% from 21,532 a year earlier, according to MDA DataQuick of San Diego.
October marked the 16th month in a row with a year-over-year sales gain, although last month’s was the smallest of those increases. In October, the median price paid for a Southland home was $280,000, up 1.8% from $275,000 in September but down 6.7% from $300,000 in October 2008. It was the median’s smallest annual decline for any month since September 2007, when the median fell 4% from a year earlier. September 2007 – one month after the current credit crunch hit – marked the beginning of a 26-month streak of year-over-year declines in the median price.
The region’s overall median sale price has risen or held steady on a month-to-month basis ever since it dropped to a more-than 7-year low of $247,000 in April. Last month the median was 44.6% lower than the peak $505,000 median reached during several months in early and mid 2007.
October marked the 16th month in a row with a year-over-year sales gain, although last month’s was the smallest of those increases. In October, the median price paid for a Southland home was $280,000, up 1.8% from $275,000 in September but down 6.7% from $300,000 in October 2008. It was the median’s smallest annual decline for any month since September 2007, when the median fell 4% from a year earlier. September 2007 – one month after the current credit crunch hit – marked the beginning of a 26-month streak of year-over-year declines in the median price.
The region’s overall median sale price has risen or held steady on a month-to-month basis ever since it dropped to a more-than 7-year low of $247,000 in April. Last month the median was 44.6% lower than the peak $505,000 median reached during several months in early and mid 2007.
MP: More evidence from October sales data that the real estate market in California has stabilized and is now starting to show continued signs of gradual monthly improvements. With 16 consecutive months of year-to-year sales increases, and now six straight months of price increases, it's looking more and more like a gradual, but solid recovery.
14 Comments:
Speaking of California that absurd, animal farm like state will be having yet another wave of crime consisting of newly needed black marketeers and smugglers...
California Bans Most Televisions
As expected, California regulators voted today to ban televisions it deems as too power-hungry. The ban will mean that Californians won't be able to legally buy the same quality televisions that are available in the rest of the country. Only around 25 percent of televisions currently sold meet California's energy standards...
I'm in escrow and the areas I looked in really did increase in price since early 2009. Not the median, but the actual comp sales from earlier in the year are noticeably lower than what's available now.
All the realistically priced houses move fast, and I mean in a week they're off the market. I bid 8% over ask on one and lost it to someone else. Outbid 4 on the escrow I'm in.
In celebration, I'm going to put plasmas in each bathroom, bedroom, the kitchen, and a huge one in the garage for all my neighbors to see. And I'm going to use baby seal fur to cover my sofas.
Die, recession, die, die, die!
Housing is coming back in SoCal.
The office market may have a long, long road back.
It is fun to blame the government for everything, and I certainly blame the feds for creating the coast-to-coast rural welfare state we have.
But think about the SoCal office market--it is nearly a free market. No one is forced to finance office buildings, and no one is compelled to buy office building debt in the CMBS market. No one is compelled to build office buildings by CRA or anything else.
And it collapsed, with values cut in half, and banks taking back towers and all the rest. The mantra for bankers is, "lend, extend and pretend."
I see no need for about 15 percent of SoCal office space, now, or many years into the future. Downtown Los Angeles, amazingly, has been overbuilt since the 1980s.
Building sell for about one-half as much today--in current dollars!-- as they did in the mid-1980s!
Many, many private investors have lost their pants on SoCal office space, and repeatedly since the 1970s. Actually, usually they are losing institutional investor money, such as pension funds etc.
All of this w/o any government interference.
It does make me wonder if free markets are prone to busts, and if government counterweights are needed. People are prone to manias.
FHFA -- next housing price report November 24 based on repeat sales of the same houses.
S&P/Case-Shiller due about the same time.
I tnink median price increase just means lower income folks couldn't get a loan.
OA,
You made me laugh so hard, coffee (hot) came out of my nose...son-ofa-bitch....
"In celebration, I'm going to put plasmas in each bathroom, bedroom, the kitchen, and a huge one in the garage for all my neighbors to see. And I'm going to use baby seal fur to cover my sofas"...
LOL! Excellent OA...
BTW OA its baby harp season again just in case you need some pelts for that couch...
I'm wondering about this supposed commercial real estate bubble that's apparently just around the corner or happening now (mentioned here and here) and how that's going to possibly impact (driving them lower?) housing prices...
Any ideas?
I hate to be part of the Cassandra Choir but these nuggets of news keep surfacing...
Bob Toll: FHA Lending Is A "Train Wreck"
Robert Toll, CEO of Toll Brothers (TOL), the largest luxury homebuilder in the U.S., is cautioning that the Federal Housing Administration is going to end up as the next subprime mortgage crisis...
According to inflation adjusted historical norms house prices across the U.S. have a little futher decline. Here is a chart based on Robert Shiller's work that shows the norms back to 1980 and another chart that goes to 1890 is available by click here!Of course local results may vary.
juandos said...
I'm wondering about this supposed commercial real estate bubble that's apparently just around the corner or happening now (mentioned here and here) and how that's going to possibly impact (driving them lower?) housing prices...
Interesting (very limited) data point. A client is doing sale lease backs on some smaller retail properties (around the US) to zero out the company's debt. They're having no problems getting multiple offers, about half of which are all cash. People with cash are looking for yield, and seem to be playing a long term inflation hedge by buying property.
That's not to say the larger commerical market doesn't have issues because those are loaded with debt that was taken out in recent, better times.
To amplify Bennt, Behavioral economics includes a section that says that humans are prone to the bandwagon effect i.e. the train is leaving the station get on or get run over ... Both in Commercial Real Estate as well as Homes there was a lot of this (on the home side buy now because prices will never come down, if you don't buy now you will never be able to). Real Estate types always say its a good time to buy, since they have a huge 800 pound conflict of interest (they only get paid when a sale happens). So they push the bandwagon hard.
On the first comment Vizio said it can meet the standards with no problem, and the industry admits that the 2011 standard allows 75 % to meet the standards, and by 2013 it is likely that most tv's will meet the standards. The industry reaction was the typical "I don't wanna cry cry cry" Why do we distrust engineers so much, they are great when presented a challenge they figure out how to meet it. Look at refrigerators now 75% more efficient than 30 years ago for about the same nominal price.
Anonymous said...
Why do we distrust engineers so much, they are great when presented a challenge they figure out how to meet it. Look at refrigerators now 75% more efficient than 30 years ago for about the same nominal price.
Well why don't we just legislate 10 watt TVs then, with a bicycle powered electric generator built on to make up the difference? 4 seats for the family model big screen.
What right does the government have to decide that I can't buy a big plasma tv? The level of intrusion is getting ridiculous. I'm completely for those labels that estimate how much a given refrigerator or other appliance would cost to run in a year. But outright capping is way overboard.
They could save consumer a lot of money by requiring 30MPG minimum for any new car or truck. Why haven't they done that instead of the fleet average? Consumers spend way more on gasonline than electrcity, and should be saved from themselves. They just don't know what's good for them.
"People with cash are looking for yield, and seem to be playing a long term inflation hedge by buying property"...
So it would seem OA but isn't cash losing some of its usefulness?
Note the following from the site, Calculated Risk: Housing Starts Decline Sharply in October
Total housing starts were at 529 thousand (SAAR) in October, down 10.6% from the revised September rate, and up from the all time record low in April of 479 thousand (the lowest level since the Census Bureau began tracking housing starts in 1959). Starts had rebounded to 590 thousand in June, and have move sideways (or down) for five months...
Hey gettingrational thanks for the following: The housing bubble is bursting and home prices are falling!
its improving much better than the sales last September..if November sales exceed the October sales..
Ya'll .... it is SoCal ....
The comment about plasmas is about wasting electricity ....
"Someone in Oregon will turn of the lights so we can turn ours on. So, if they are going to save, so we can waste? We MUST waste."
SoCal wastes water, gas, money, taxes, and a LOT of electricity.
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