April 17, 2014

Elvis Has Left The Building

The Press Enterprise reports from California. “Home sales across Southern California fell to a six-year low as median prices rose to its highest point since 2008, DataQuick said. ‘Southland home buying got off to a very slow start this year, with last month’s sales coming in at the second-lowest level for a March in nearly two decades,’ DataQuick analyst Andrew LePage said in a  statement. Freda England, of Century 21 Lois Lauer Realty, said prices are going up really high, really fast and that’s making buyers and sellers think twice. ‘There’s still a little hesitancy because of the economy,’ she said, pointing out that the market seems to be in somewhat of a watch-mode.”

“Rich Simonin, broker and co-owner of Wescoe Realtors, offered another view. ‘Elvis has left the building,’ he said. ‘The last rungs of investors are gone, and I think that’s taken unit sales down.’”

The Orange County Register. “Sales of new and luxury homes in March helped boost the Orange County median home price to $580,000, the highest point in seven years, according to DataQuick. The overall number of home sales continued to slide, however, down 5.8 percent, though sales of new homes nearly doubled from a year ago as more projects made a debut. Data also released this week by Steven Thomas show that Orange County’s housing supply is on the upswing, with 6,115 active listings, a 29 percent increase since January.”

“More buyers this year are looking for homes rather than investments, agents said, so the criteria is different from the frenzied bidding wars of last spring, when anything with four walls was a quick sell, often above the asking price. ‘An upgraded, well-maintained, priced-well home … is moving quickly with multiple offers,’ said Andrea Ballesteros of First Team Real Estate in Laguna Beach. But, she added, ‘we are seeing price reductions on homes that are not upgraded, not maintained well and do not show well.’”

The Los Angeles Times. “Southern California home prices are surging as the spring buying season heats up, with the median price in March hitting $400,000 for the first time in six years. But a deeper look at the market reveals a recovery divided between the rich and everyone else. The market for high-dollar homes is hopping, with sales on the rise and buyers launching bidding wars. But sales of low- to medium-priced homes have plummeted during the same period — with many potential buyers priced out.”

“‘Housing affordability is really taking a bite out of the market,’ said Leslie Appleton-Young, chief economist for the California Assn. of Realtors. ‘We haven’t seen this issue since 2007.’”

“Carey Chenoski, a real estate agent in Redlands, said she has seen less interest in homes for sale lately as first-time buyers struggle to afford the new higher prices. There are more homes on the market than last year — which is keeping further price growth in check — but they’re not selling. That is frustrating some sellers. Chenoski recently saw the price on a three-bedroom in Redlands reduced to $299,000 from $315,000 — and it still didn’t sell. So it was taken off the market. ‘Lately on Saturdays and Sundays, you see open house signs everywhere,’ she said. ‘The houses that last spring would be gone in the first day are sitting maybe 60 days.’”

“The number of homes listed for sale in March, while still historically low, was up 54% in the Inland Empire and 64% in Orange County compared with the same month last year, according to the website Realtor.com.”

The Mercury News. March marked more than 20 consecutive months of year-over-year price gains for single-family homes in the East Bay, South Bay and Peninsula, according to DataQuick. But the number of March sales in the Bay Area was the lowest in six years. In Contra Costa County, price gains have shrunk the supply of homes for sale for less than $300,000, according to Marilyn Cunningham, president of the Contra Costa Association of Realtors. That’s made it tough on first-time buyers, she said.”

“‘If I have client that’s a first-time buyer and they want to look under $300,000, that knocks out Concord,’ Cunningham said. ‘The house you could buy a year ago for $250,000 to $300,000 is now selling for $425,000. It’s the same in Martinez.’”

“The Contra Costa Association of Realtors said there’s hope — its latest figures show the inventory of homes has begun to grow.  ‘For the first time in recent memory, supply is poised to outstrip demand,’ the association reported.’

The Press Democrat. “In the last five years, sales of entry-level homes have never gotten off to a slower start in Sonoma County, while transactions for move-up and luxury properties have never been so strong at this time of year. The jump in higher-end sales helped push the county’s median sales price in March to $498,000, according to The Press Democrat’s monthly housing report compiled by Pacific Union International VP Rick Laws.”

“The median price has increased 56 percent in the last two years and now stands at its highest point for the month of March since 2007. Buyers last month purchased 353 single-family homes, a decline of 12 percent from March 2013. Real estate brokers said the pace of sales in the different price segments has been noticeable. ‘It seems like the bottom of the market has kind of gone stale,’ said Belinda Andrews, a broker associate for Century 21 in Santa Rosa. Meanwhile, she said, buyers were snapping up properties priced at or above $700,000.”

“One change in the market is that more buyers now are canceling transactions when issues arise, said Gerrett Snedaker, a senior VP in Sonoma for Wine Country Group by Better Homes and Gardens Real Estate . Those spending $900,000 on a home aren’t as willing to make thousands of dollars in unforeseen repairs without some concessions from the seller. ‘The buyers are fighting back,’ Snedaker said.”

From KCBS. “A new report by RealFacts, which provides an apartment database and tracks rental market rates has found that Bay Area apartment rents have reached record levels. Stephen Levy, Director of the Center for Continuing Study of the California Economy in Palo Alto, said the skyrocketing prices are having wide-ranging effects. ‘There are two challenges to a hot economy. One is traffic and high rents and housing prices are a second piece,’ Levy said. ‘Eventually, companies will be less likely to expand here [the Bay Area] because the people they are looking to hire will be looking at very long commutes or very expensive home prices and rents.’”

“And on whether the ‘coolness’ factor of living in the Bay Area or Los Angeles will wear off, Levy had some interesting thoughts. ‘I think people are struggling to deal with the fact that this is a hot area, we’re going to be more dense, and there’s going to be more traffic unless we handle it. It’s a challenge. If you want low housing prices and really good traffic, have a deep recession,’ he said.”

Bits Bucket for April 17, 2014

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