Sunday, November 20, 2011

CA October Home Sales: Adjusted for Inflation, Typical Mortgage Payment Now Lowest On Record

From DQ News on California October Home Sales:

"An estimated 34,087 new and resale houses and condos were sold in California last month. That was down 3.7 percent from 35,404 in September, and up 4.3 percent from 32,669 for October 2010. California sales for the month of October have varied from a low of 25,832 in 2007 to a high of 70,152 in 2003, while the average is 43,528. DataQuick's statistics go back to 1988. 

The median price paid for a home last month was $240,000, down 3.6 percent from $249,000 in September, and down 6.3 percent from $256,000 for October a year ago. The median has decreased on a year-over-year basis for the last thirteen months. The bottom of the current cycle was $221,000 in April 2009, while the peak was at $484,000 in early 2007. Distressed property sales – the combination of foreclosure resales and “short sales” – continued to make up more than half of California’s resale market.

The typical mortgage payment that home buyers committed themselves to paying last month was $924, the lowest since early 1999. That was down from $964 in September, and down from $1,005 in October 2010. It was 58.8 percent below the spring 1989 peak of the prior real estate cycle. It was 66.6 percent below the current cycle's peak in June 2006."

MP: Here's the most amazing part of the report: "Adjusted for inflation, last month's mortgage payment was the lowest on record."

10 Comments:

At 11/20/2011 8:33 PM, Blogger VangelV said...

MP: Here's the most amazing part of the report: "Adjusted for inflation, last month's mortgage payment was the lowest on record."

A slow economy, weak housing market, and record low interest rates will do that. If you are looking at the price in terms of gold it has been reported that the average single family home in the United States has fallen to just 18% of its 2001 price.

 
At 11/20/2011 8:52 PM, Blogger cluemeister said...

And with continued massive government spending, record expansion of government powers, and hostile business environment, there will be no real job growth.

And without job growth we will continue to see a crap real estate market.

Welcome to Obamaville!

 
At 11/21/2011 2:46 AM, Blogger PeakTrader said...

If the U.S. was building houses closer to its capacity, home buyers would be better off, because aggregate income would increase even more than home prices.

Instead, we have massive idle resources, from building too few houses.

 
At 11/21/2011 6:05 AM, Blogger rjs said...

"Adjusted for Inflation, Typical Mortgage Payment Now Lowest On Record"

might be the same for jobs created during this recession, too; the majority pay less than $13/hour...

 
At 11/21/2011 9:39 AM, Blogger morganovich said...

of interest though is the huge spike in rental prices.

the reason these prices are so low is that few can get a mortgage.

new purch applications remain at very low levels.

it's a great deal if you can get a loan and have 20% down, but few can/do.

thus, they rent.

rents in san francisco are up 20-30%.

it's easy to pay $6k for a 2br that was 5k just a year or 2 ago.

surging rents and falling home prices tell you everything you need to know about the ability to take advantage of these great deals.

 
At 11/21/2011 11:02 AM, Blogger Benjamin Cole said...

Yet the Chicken Littles are screaming "inflation."

 
At 11/21/2011 12:21 PM, Blogger morganovich said...

bunny-

rents are soaring at the same time that home ownership % are plummeting.

low home prices and mortage rates are only useful to the tiny number of people who are first time buyers.

otherwise, you are buying with depreciated currency and it is not an advantage to you.

this tiny slice of the population is swamped by rent hikes, which are up in the very high single digits.

of course, the BLS underweight rent to 4-5 points of the 40 for shelter and focuses on "owner equivalent rents" for over 25 points, but this absurdity has nothing to do with where people live.

35% of americans rent, but rent carries only 1/5th the weight of ownership in the data. (it should be about 50%)

just another example of the BLS ignoring the part of the market that is soaring so the head in the sand benji crowd can feel warm and fuzzy.

so riddle me this oh bar stool maven, what possible rational reason is there to count 35% of the market as 16%? hmmmmmm?

try actually looking at the data for once.

you might learn something.

 
At 11/21/2011 12:26 PM, Blogger morganovich said...

also:

note that your argument is circular an meaningless, demonstrating your inability to understand units once again.

using an inflation adjusted price to claim low inflation is stupid even for you. i didn't think you could top your unit labor ignorance, but this did it.

inflation adjusted prices tell us NOTHING about inflation.

homes could be up 1% and prices 2%, or homes could be up 200% and CPI 202%.

in either case, you get a n inflation adjusted decline.

also note:

mortgage payments are NOT the same as home prices either.

a house could go up in price from 100k to 120k, (20% inflation) but still have the mortgage payment drop because rates go from 4% to 3%.

that's not a lack of inflation.

seriously bunny, you need to think before you squawk. this is a new level of embarrassing yourself

 
At 11/21/2011 1:41 PM, Blogger Richard Rider said...

One ploy of the California public labor unions and public school funding shills is to cite the high cost of living in this state. Most of that cost is based on housing prices of about 2006 (a.k.a. the peak). This blog item is a timely piece for me to disseminate. Thanks.

In San Diego, we've gone from a peak median residential sale price of over $510K in 2006 down to as low as $280K, and now are now at a bit over $300K. Coupled with the lower mortgage rates, that's an amazing reduction in housing costs.
http://www.trulia.com/real_estate/San_Diego-California/market-trends/

You may be shocked to learn that CA public employees have not received a commensurate drop in their compensation. Not hardly.

Yes, this housing price drop has been a nationwide trend, but CA has always been notable for its unaffordable housing. Now, with a average new mortgage of $924, perhaps not so much.

 
At 11/21/2011 1:58 PM, Blogger Richard Rider said...

Morganovich cites the San Francisco rental market to give us the flavor of CA rentals. Really???

That's like using Manhattan to give us a feel for East Coast rental costs and trends.

Yes, CA rentals are still quite high compared to the rest of the nation, but not shooting up as he claims. This past year rents in southern California (lots of Californians live there) went up less than 3%.
http://lansner.ocregister.com/2011/07/11/socal-rent-hikes-trail-u-s-average/116347/

 

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