February 19, 2015

Prices Got A Little Bit Out Of Control

A report from the California used house salespeople. “California’s housing market started the new year still bearing the scars of 2014’s tight housing inventory and low housing affordability as statewide home sales fell from the previous month and year, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said. The median price of an existing, single-family detached California home fell 5.9 percent from December’s median price of $453,780 to $426,790 in January but was up 3.4 percent from the revised $412,820 recorded in January 2014. According to C.A.R.’s newest housing market indicator measuring sales-to-list price ratio, properties are again generally selling below the list price, except in the San Francisco Bay Area.”

“‘While the statewide unsold inventory index in January jumped to the highest level in nearly three years, the increase can be attributed in large part due to the drop in sales,’ said C.A.R. Chief Economist Leslie Appleton-Young. ‘Overall, active listings statewide showed a near double-digit increase from last January, but supply conditions weren’t all positive at the regional level.’”

The Mercury News. “The report from CoreLogic DataQuick shows that Bay Area home sales posted their slowest performance in seven years last month and that the lack of housing supply helped push prices up 9 percent from a year earlier. The median price paid for a home in January fell from the previous month. CoreLogic DataQuik analyst Andrew LePage cautioned that one month’s performance does not a long-term trend make. ‘January isn’t really a bellwether month when it comes to housing trends. For that we’ll have to wait until spring,’ LePage said. ‘But the latest data do indicate the market continues to struggle with challenges that many in the industry hoped would be resolved last year.’”

The Sacramento Bee. “Historically, January is a dismal time for home sales, and last month’s totals lived up to those expectations. CoreLogic DataQuick said Wednesday that January sales of all Sacramento County homes – new, resale and condos – totaled 1,257, down 29 percent from 1,770 in December and a 5.1 percent decline from 1,325 in January 2014. The January drop was similar in the Bay Area. CoreLogic DataQuick said 4,439 new or resale homes and condos sold last month in the nine-county Bay Area, a whopping 40.5 percent drop from December and a 5.5 percent decline from January 2014.”

“The median sales price among all homes in Sacramento County last month was $246,000, up nearly 5 percent from $235,000 in January 2014 but 3.5 percent below $255,000 in December 2014. The Sacramento Association of Realtors said single-family home sales in Sacramento County and West Sacramento decreased 29.4 percent from December to January – from 1,313 to 927. SAR said the December-to-January median sales price decreased 3.7 percent, from $268,000 to $258,000. The January median price is 6.6 percent more than the $242,000 median reported in January a year ago.”

The Glendale News Press. “The median price for a Glendale home in January was slightly lower than the same time last year, while the first month of 2015 saw the second lowest number of homes sold in the past 12 months, according to the latest real estate report. The median price for a single-family home was $742,000 last month, a small slide from $750,000 during January 2014, according to statistics compiled by Realtor Keith Sorem with Keller Williams Realty. Also, only 22 homes were sold last month, the lowest since February 2014.”

“In La Cañada Flintridge, the median price for a single-family home was $1.35 million last month, down from $1.78 million the same time a year ago. The inventory exploded as 168 properties were listed for sale in January, up dramatically from 81 in the first month of 2014. Thirty homes sold in January, up from 25 a year ago.”

From LA Curbed. “The housing market in Southern California continues to descend into a slump as prices rise and the number of sales falls, according to the most recent numbers from DataQuick and the California Association of Realtors. Throughout the six SoCal counties, sales were 21.7 percent below the average for January (starting in 1988). CAR found pretty much the same thing throughout the state. Their data for the metro area (rather than the county) shows the number of sales dropped 7.1 percent over the past year and the median price rose 2 percent, to $387,530, but dropped from December’s $413,150.”

“Not all sales are equal. The market continues to live a double life—the number of sales above $500,000 rose slightly, by 2 percent, but sales under $500,000 saw a double-digit drop—13.8 percent—and sales under $200,000 dropped by a third.”

The Orange County Register. “It appears that Orange County homebuilders have caught a case of the homebuying blues. The local housing market started the year with more of the same, but with a twist. According to the January report from CoreLogic DataQuick, housing transactions continued to dip: January’s 1,982 home sales were 10 percent below the previous year. Price increases continue to erode: January’s 2.3 percent year-over-year gain in the median selling price was the smallest advance in 31 months.”

“The surprise twist was that Orange County builders – among the stars of the recent housing recovery – now look like laggards. My trusty spreadsheet tells me the 190 new homes sold in January were 41 percent fewer than a year ago – the third consecutive month of year-over-year drops after 26 consecutive months of gains. In the last three months, developers have sold 902 homes – down 29 percent from the same period a year-ago and the slowest sales pace since October 2013.”

“Orange County’s median selling price for a new home is up 41 percent in four years, compared with a 30 percent gain for resale single-family homes, according to CoreLogic DataQuick. The recent slowdown suggests that builders may have gone too far. Builder prices, says Erik Franks of John Burns Real Estate Consulting, ‘got a little bit out of control.’ But don’t expect any cuts soon, he says, because developers ‘would rather have homes sit than discount.’”

“Everybody should be watching to see if homebuilders can regain the magic touch with shoppers. If not, you can expect developers to do what they hate to do: discount. And that could be bad news for the overall housing market.”

Bits Bucket for February 19, 2015

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