June 13, 2012 – Source: Dataquick – Abridged
The Southland housing market continued its long, step-by-tiny-step trek back toward normalcy in May, when the median sale price rose year-over-year for the second consecutive month, reaching a 20-month high. Home sales increased across the region but the gains were highest in coastal areas, where move-up markets have picked up steam, areal estateinformation service reported.
The median price paid for a home in the six-county Southland rose last month to $295,000, up 1.7 percent from $290,000 in April and up 5.4 percent from $280,000 in May 2011.
Last month’s median was the highest since the median was $295,500 in September 2010. The year-over-year gain in the May median followed a 3.6 percent annual increase in April. Before then, the median had fallen year-over-year for 13 straight months.
Orange County May Sales increased 23.10%, and the median price increased 2.4% to $435,000 year-over-year.
The rise in the median price is the result of higher demand and two other trends. First, there’s been a significant drop in the share of transactions that are foreclosed properties, which tend to sell at a discount and be concentrated in lower-cost areas. Second, a greater portion of sales are occurring in the higher-cost coastal markets. Last month, for example, sales inSan Diego,Orange,Los AngelesandVenturacounties represented about 70 percent of all activity, up from 67.6 percent a year ago.
Last month’s total Southland sales rose nearly 21 percent compared with a year ago, and activity increased across the home-price spectrum. But the gains were strongest above $300,000. The volume of transactions in lower-cost markets has been restrained by, among other things, the dwindling inventories of homes for sale, especially foreclosures.
The number of Southern California homes sold in May for less than $200,000 rose 7.0 percent from a year earlier, while the number that sold for $200,000 to $400,000 increased 18.9 percent. Sales between $300,000 and $800,000 – a range that would include many move-up buyers – jumped 23.1 percent year-over-year. Sales over $800,000 rose 11.8 percent from May 2011.
“The market is being slowly nursed back to health by low interest rates, a modestly improved economy and, we suspect, a widening sense that the housing sector is at or near bottom. There’s still plenty of uncertainty swirling around out there. But it looks like more move-up buyers are concluding it makes sense in the long run to sell their homes now, even when it’s hard to swallow the price. The upside for many is a good deal on the next house, and the ability to lock in both a killer mortgage rate and a relatively low property tax base,” said John Walsh, DataQuick president.
Last month’s $295,000 median sale price was 41.6 percent below the $505,000 peak in mid 2007. It was 19.4 percent above the Southland’s low point for the currentreal estatecycle – $247,000 in April 2009.
In May, a total of 22,192 new and resale houses and condos sold inLos Angeles,Riverside,San Diego,Ventura,San BernardinoandOrangecounties. That was up 15.1 percent from 19,284 in April, and up 20.6 percent from 18,394 in May 2011.
Home sales typically rise between April and May, with that increase averaging 6.7 percent since 1988, when DataQuick’s statistics begin.
On a year-over-year basis, Southland home sales have increased for five consecutive months, with last month’s 20.6 percent annual gain the largest in the series. Sales have also increased year-over-year in nine out of the last ten months. Still, last month’s sales were 14.5 percent lower than the average sales tally for all the months of May since 1988.
The month-to-month and year-over-year increases in sales last month would not have been as great if this May hadn’t had one extra business day on which sales could close. While last month had 22 business days, this April and May 2011 had 21 business days.
Last month 22.4 percent of all Southland sales were for $500,000 or more, up from 21.0 percent in both April and a year earlier. May’s share of sales above $500,000 was the highest since July 2010, when they also made up 22.4 percent of the market. The low point for $500,000-plus sales was in January 2009, when only 13.8 percent of sales crossed that threshold. Over the past decade, a monthly average of about 28 percent of homes sold for $500,000 or more.
Distressed sales – the combination of foreclosure resales and short sales – made up 44.8 percent of last month’s resale market. That was the lowest level since the figure was 44.4 percent in March 2008.
Foreclosure resales – properties foreclosed on in the prior 12 months – accounted for 26.7 percent of the resale market last month, down from 28.8 percent in April and 33.2 percent a year earlier. Last month’s figure was the lowest since foreclosure resales were 24.3 percent of the resale market in December 2007. In the current cycle, the figure hit a high of 56.7 percent in February 2009.
Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 18.1 percent of Southland resales last month. That’s unchanged compared with the month before and up from 17.8 percent a year earlier.
Investor and cash-only home purchases remain near record levels.
Absentee buyers – mostly investors and some second-home purchasers – bought 27.0 percent of the Southland homes sold last month. That was down from 28.4 percent the prior month and up from 25.1 percent a year earlier. The record was 29.9 percent in February this year, while the monthly average since 2000 is 17.2 percent. Last month’s absentee buyers paid a median $225,000, up from $220,000 the month before and $212,500 a year earlier. The median paid by absentee buyers last month was about 24 percent lower than the $295,000 median paid for all homes sold in May.
Buyers paying with cash accounted for 31.3 percent of May home sales, down from 32.2 percent the month before and up from 29.2 percent a year earlier. Cash purchases peaked at 33.7 percent of all sales this February, and since 2000 the monthly average is about 15 percent. Cash buyers paid a median $232,500 last month, up from $225,000 the prior month and $220,000 a year ago. The median price paid by cash buyers was about 21 percent lower than the median paid for all homes sold last month.
The typical monthly mortgage payment Southland buyers committed themselves to paying last month was $1,100, compared with $1,096 the month before and $1,154 a year earlier. Adjusted for inflation, last month’s typical payment was 53.6 percent below the typical payment in the spring of 1989, the peak of the prior real estate cycle. It was 62.0 percent below the current cycle’s peak in July 2007.
For questions about buying and selling real estate in Orange County, contact Scot Campbell. He is the President of The Scot Campbell TEAM at Coldwell Banker-Campbell Realtors in Huntington Beach, CA. He has been a licensed broker for over 21 years and has brokered over 1000 homes and just about every type of transaction imaginable. Read his profile and client reviews at www.ScotCampbell.com He can be reached at 714-960-0700 at the office, 714-336-0394 on his mobile number or via email at Scot.Campbell@ColdwellBanker.com
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