More news on the California Comeback… Southern California home sales rose for the 11th consecutive month in May and the median price paid increased for the first time since July 2007. This increase seems to be the result of a shift in market activity where sales mid- to high-end ($500,000 and over homes) purchases actually rose.
A total of 20,775 new and resale houses and condos closed escrow in San Diego, Orange, Los Angeles, Ventura, Riverside and San Bernardino counties last month. May’s sales were the highest for that month since May 2006, when 30,303 homes sold. It was up 1.3 percent from 20,514 in April and up 22.8 percent from 16,917 a year ago, according to San Diego-based MDA DataQuick.
Foreclosure resales – homes sold in May that had been foreclosed on in the prior 12 months – accounted for 50.2 percent of all Southland resales. That was down from 53.5 percent in April and from a peak of 56.7 percent in February. May’s figure was the lowest since foreclosure resales were 50.9 percent of all resales last October.
Last sales of $500,000 and above Southland houses rose from 15.2 percent of sales in April to 17 percent in May. The last time the $500,000-plus market made up more than 17 percent of all sales was last October, when they were 19.9 percent of sales.
The median price paid for all new and resale houses and condos sold in the six-county Southland last month was $249,000, up 0.8 percent from $247,000 in April but down 32.7 percent from $370,000 a year ago.
The median price hadn’t risen from one month to the next since July 2007, when it increased 0.6 percent from $502,000 to $505,000. Last month’s median was the second-lowest for any month since it was $242,000 in February 2002, and it stood 50.7 percent below the peak $505,000 median reached in spring and summer of 2007.
“We appear to be in the early stages of the market gradually tilting back toward a more normal balance of sales across the home price spectrum. As more sellers get realistic, more buyers get off the fence and more lenders offer reasonable terms for high-end purchase financing, we’ll see a more normal share of sales in the more established, higher-cost areas that have been nearly comatose,” said John Walsh, MDA DataQuick president.
“Let’s not forget we’re into the traditional home buying season right now,” he continued, “meaning more people are purchasing for all of the normal reasons, such as a new job or to get settled before school starts. Many are concerned with finding the right home in the right area, not just the most deeply discounted home.”
At the lower end of the price spectrum, first-time buyers continue to rely heavily on government-insured FHA financing. Such loans were used to finance 38.4 percent of all Southland home purchases last month, down slightly from 38.9 percent in April but up from 19.7 percent a year ago.
Absentee buyers, including investors who will have their property tax bills sent to a different address, bought 19.4 percent of the Southland homes sold last month. That’s up from 16.9 percent a year ago and 18.6 percent in April. The monthly average since 2000: 15 percent.
The typical monthly mortgage payment that Southern California buyers committed themselves to paying was $1,052 last month, down from $1,782 a year ago. Adjusted for inflation, current payments are 52.1 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 60.7 percent below the current cycle's peak in July 2007.
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Sales Volume |
Median Price |
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All homes |
May-08 |
May-09 |
%Chng |
May-08 |
May-09 |
%Chng |
|
Los Angeles |
5,445 |
6,521 |
19.8% |
$422,000 |
$300,000 |
-28.9% |
|
Orange |
2,266 |
2,667 |
17.7% |
$485,000 |
$410,000 |
-15.5% |
|
Riverside |
3,444 |
4,414 |
28.2% |
$290,000 |
$180,000 |
-37.9% |
|
San Bernardino |
2,075 |
3,134 |
51.0% |
$250,250 |
$137,000 |
-45.3% |
|
San Diego |
2,979 |
3,242 |
8.8% |
$380,000 |
$295,000 |
-22.4% |
|
Ventura |
708 |
797 |
12.6% |
$435,000 |
$355,000 |
-18.4% |
|
SoCal |
16,917 |
20,775 |
22.8% |
$370,000 |
$249,000 |
-32.7% |
I've been talking about the California Comeback for a while now. If you've missed my posts, please read this:
Housing Hits Bottom
California Home Price Bottom?
No. California Home Sales Up 7th Month
New Starts and Permits Down: Housing Bottom is Here
So. California Home Sales Up 9th Month in a Row
I hope you are ready for this… and out there calling sellers and REO agents about buying their properties for well below even todays low market values. There are deals happening everywhere, but not for everyone. You must know which deals to chase and which to let go. You must know who is motivated to sell and who is not. You must know what to offer them to lock in your 15% profit on your purchase. And you must know how to contract your deals so they get accepted by both your seller and your investor (if you plan to use outside money to fund your deals).
And this is exactly what I will be talking about in my next Mastering Mini Lab Live Webinar, Tuesday, June 23rd at 6pm PDT. You must register in advance as this is an interactive webinar that I keep small to take your questions throughout the Call. And there are pre-requisites to attend. Call 800-310-7730 x2 for the details. Or visit: http://www.foreclosures.com/pages/mastering_community.asp
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