Wednesday, March 14, 2012

So. California Home Sales for Feb. Highest Since 2007; Avg. Payments of $998 vs. $2,800 at Peak

DQ News -- "The Southland housing market posted the highest number of February home sales in five years as record levels of investor and cash buyers helped spur robust activity under $300,000. The median price paid for homes across the six-county region inched up from January but dropped below the year-earlier level for the 12th consecutive month. 

A total of 15,573 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was up 7.2 percent from 14,523 in January, and up 8.4 percent from 14,369 in February 2011. 

Here are some interesting highlights:

1. Sales did not rise across the price spectrum last month. Transactions below $300,000 rose 9.5 percent from a year earlier, while the number of $300,000-$800,000 deals dipped 0.8 percent year-over-year and sales above $800,000 fell 12.6 percent. 

2. Distressed sales continued to make up more than half of the resale market. Foreclosure resales – properties foreclosed on in the prior 12 months – accounted for 32.5 percent of the resale market last month, down from a revised 32.6 percent in January and down from 37.0 percent a year earlier. Foreclosure resales hit a high for the current cycle of 56.7 percent in February 2009 and a low of 31.6 percent last November. 

Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 20.5 percent of Southland resales last month. That compares with 21.1 percent in January, which was a high point for the current real estate cycle, and 19.7 percent in February 2011. 

3.  Absentee buyers – mostly investors and some second-home purchasers – bought a record 29.7 percent of the Southland homes sold in February, up from a revised 28.0 percent in January and 26.4 percent a year earlier.

4. The typical monthly mortgage payment that Southland buyers committed themselves to paying was $998 last month, compared with $983 in January, which when adjusted for inflation was the lowest in DataQuick’s records back to 1988. Last month’s figure was down from $1,174 for the same month last year. Adjusted for inflation, current payments are 56.9 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 64.7 percent below the current cycle’s peak in July 2007 [of $2,827].


At 3/15/2012 2:44 AM, Blogger PeakTrader said...

We can praise the Fed for low mortgage rates:

March 2012:

"NAR’s Housing Affordability Index rose to a record high 206.1 in January...This is the first time the housing affordability index has broken the two hundred mark, meaning the typical family has roughly double the income needed to purchase a median-priced home."

At 3/15/2012 7:30 AM, Blogger Larry G said...

WHAT! I thought people were leaving California in DROVES how come prices are going UP?

At 3/15/2012 10:45 AM, Blogger morganovich said...

california real estate is always a special case, at least in the desirable areas.

i sold my place in SF about 16 months ago at over $1400/ft2.

the market there has boomed since then. there is virtually no supply and it is driven by the tech IPO cycle.

CA gets big foreign buying as well with big cash buyers from overseas wanting beachfront and SF apartments.

but go inland to fresno, stockton, etc and it's a wasteland because righ europeans and asians have zero interest.

california as a whole is down over 6% year on year.

be careful confusing one small market with the whole state lar.

At 3/15/2012 4:25 PM, Blogger VangelV said...

We can praise the Fed for low mortgage rates:...

Praise? Shouldn't the Fed Governors be put in jail for stealing purchasing power from everyone just to enrich the front-running bankers? What about all of those people dependent on fixed income? Should they praise the Fed? How about all those people who lost their retirement savings thanks to the bubbles in tech and housing that the Fed created?

At 3/15/2012 6:04 PM, Blogger morganovich said...

i agree with vangel.

further, if the fed had not driven such low rates, housing prices would have dropped further, making them even more affordable.

as it is, they have painted the market into a corner. people buy house based on payment, not price.

rates will go back up at some point. when they do, housing prices propped up by outlandish twist and zirp and the GSE's buying up 90% of the market are going to be under severe pressure, and the long lending at low rates of the GSE's will wind up driving big losses on the gse mortgage portfolio.

mortgages price just like bonds. when rates rise, prices of bonds fall.

they are just setting up the next crisis.

At 3/15/2012 6:15 PM, Blogger PeakTrader said...

VangelV and Morganovich, two wrongs don't make a right.

The Fed is about the only thing holding up this economy.

You can thank the Fed later.

At 3/15/2012 6:17 PM, Blogger PeakTrader said...

Bubbles are good in depressions.


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