Wednesday, June 16, 2010

May So. California Home Sales Highest in 4 Years

DQNews -- "Southern California May home sales rose in all but the lowest price categories as buyers took advantage of tax credits and low mortgage rates. The median price paid topped $300,000 for the first time in 20 months, largely because the ultra bargains have been drying up in the low-cost inland areas while sales have increased in the pricier coastal neighborhoods." 

Other highlights include:

1. A total of 22,270 new and resale houses and condos closed escrow in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was up 9.7 percent from 20,299 in April, and up 7.2 percent from 20,775 in May 2009 (see chart above).

2. May sales were the highest for that month since May 2006, but they still fell 15.0 percent short of the average number sold in May since 1988, when DataQuick’s statistics begin. The 9.7 percent increase in sales between April and May compares with an average change of 6 percent since 1988.

3. Foreclosure resales accounted for 33.9 percent of the resale market last month, down from 36.4 percent in April and 49.8 percent a year earlier.

4. The median paid for a Southland home rose to $305,000 last month, up 7.0 percent from $285,000 in April, and up 22.5 percent from $249,000 in May 2009. The May 2009 median was just $2,000 higher than the median’s post-housing-boom low of $247,000 in April 2009.

“The important thing to remember, though, is that what we saw in May was partly driven by government stimulus,” said MDA DataQuick President John Walsh. “In the second half of the year the market will have to stand on its own again, barring new forms of government involvement." 

Related:

WASHINGTON -- "The home-buyer tax credit deadline would be extended three months following a vote this afternoon in the Senate. Senators voted 60 to 37 to approve the extension for the credit, which has a current deadline of June 30 to close a purchase. The credit provision is part of a larger jobs and tax package that both chambers must still vote on before it becomes law."

7 Comments:

At 6/16/2010 4:22 PM, Anonymous Benny The Man said...

Buyers are returning to the housing market of Southern California. They like the low prices and interest rates.
I expect SoCal house prices will rise slowly for a long time, while interest rates remain low for a long, long time.
Nationally, as there is gobs of housing stock out there, maybe new home construction will be weak. That's okay, as long as consumers epend on other things, and fix up existing properties.
The overall point is that the worst is over, and recovery continues. I think we see an outstanding 2011 for asset markets.
The long Bush jr. recession nightmare is ending.

 
At 6/16/2010 5:16 PM, Blogger Ron H. said...

"...while sales have increased in the pricier coastal neighborhoods."

For example this one?

 
At 6/16/2010 9:40 PM, Anonymous morganovich said...

great chart:

housing starts are still at a level that would be a post WW2 up until 2009.

http://calculatedriskimages.blogspot.com/2010/06/housing-starts-long-view-may-2010.html

cut off enough supply, and maybe prices can stabilize, but it's not a sign of economic health, especially in light of the population growth since then.

 
At 6/17/2010 8:34 AM, Anonymous Anonymous said...

This housing stimulus reminds me of...

You tell people that the sale only lasts 'till noon Friday. Come the following Monday you do the same. Its a much more effective way of pulling sales forward than having low prices everyday. As long as the consumer doesn't catch on right away.

 
At 6/17/2010 9:18 AM, Blogger Junkyard_hawg1985 said...

Morganovich,

Nice link showing the incredibly sharp decline in housing starts. While the drop in building is needed to stabilize housing, there is still a long way to go. According to the census bureau, unoccupied homes are currently at 2.6%. Historically, this number has typically been between 1-1.5%. Likewise, rental property vacancy rates are at 10.6% vs. a typical historical value of 5-8%. While the difference between 2.6% and 1.5% may not sound like much, it still represents a full year of housing overhang.

http://www.census.gov/hhes/www/housing/hvs/historic/index.html

While there may be 5 million used homes sold in a year, a buyer of one occupied house typically sells one house. The typical need for housing for replacement is around 0.9%/yr. Until some of this vacancy is eliminated, home prices won't sustain themselves (currently depending on $8000 from taxpayers).

 
At 6/17/2010 9:26 AM, Blogger juandos said...

"May So. California Home Sales Highest in 4 Years"

Proving yet again that there is a
dearth of intelligent adults in California...

 
At 6/17/2010 10:21 AM, Blogger Paul said...

I just evaluated a very nice foreclosure in Az that sold for 650 k in 2005. In 2007 it sold again for 500 k, the new buyer probably thought he was getting a steal.

Opening bid on the auction block was 150 k. Comps at around 220 k.I think it sold for around 195 k.

If the bottom isn't here then the next stop is to give the homes away.

 

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