How's the Market in Huntington Beach

Scot Campbell
Scot Campbell

End of 3rd Quarter Update:  Below is a recap of Single Family home sales in Huntington Beach – January 1st thru September 30, 2011.

 

Homes are selling!  But, as always, what people want to know is:  Are more homes selling, Are the prices up or down, and How long is it taking for homes to sell?  Here are the answers to those questions according to the SoCal MLS records for Huntington Beach Single Family Detached Homes (close price between $200,000 and $2 million) for the first nine months of 2011:

Looking at the market for Detached Single Family Homes in Huntington Beach for the period January 1 thru September 30, 2011 there have been 652 closed sales, the average closed sale price is $700,084 (Up from $700,772 during the first six months of the year).  The average price per square foot is $349.57 (unchanged from the first six months of the year), and the average Days on Market is 102 (up one day from the first six months of the year). 

How does this compare to last year?  Closed sales are up 1.88 percent from last year (652 in 2011 Vs. 640 in 2011).  The average price per square foot is down 4.5 percent, and it is taking longer to sell homes… about 102 days this year compared to 88 days in the same period last year.

Distressed sales including Short Sales and Bank Owned homes have represented 30.83 percent of the sales in Huntington Beach during the first nine months… this is up compared to last year (201 in 2011 Vs. 188 in 2010).

However, it is worth noting that not all segments of the market are performing the same. Take a look at the below price segments:

Homes priced up to $521,250 represent those homes which can be bought with conventional financing (loan upto $417,000) and twenty percent down.  Compared to 2010, sales in this segment are Up 62.20%, the average price of a home sold in this segment fell 2.86%, but the average size of a home sold increased 88 square feet.  As a result, the average price per square foot decreased 10.30%.  Homes are taking about 28 days longer to sell.  During the first half of the year, the entry level single family home market has had a dramatic increase in activity but prices have fallen since 2010.  Despite strong interest by homebuyers in this market segment, prices have trended down so far this year most likely due to the abundance of distressed properties… primarily short sales.  Distressed sales accounted for 48% of the properties sold in this market segment this year… this is the highest level observed among the single family price segments.  The high level of short sales properties, bank owned homes, and other distressed sales (which are sold ‘as-is’ and often in rough condition is a good explanation for the decrease in sales prices in this segment)… certainly when the buyer finishes making the necessary repairs after close of escrow, the total cost paid is a better reflection of the “price paid”.  The entry level single family home market is “hot”, and buyers are picking up homes at very attractive prices compared to last year. 

Homes priced between $521,250 and $756,000 represent those homes which can be bought with 3.5% down FHA financing.  Compared to 2010, closed sales in this segment are Down 15.58%, the average price per square foot is Down 6.90%, and homes are taking about 12 days longer to sell.  Interestingly the average sale price in this segment increased slightly (about 1%).  So far this year, 26.92% of the sales in this market segment have been distressed sales… mostly short sales or bank owned.

Homes priced between $756,001 and $912,000 represent those homes which can be bought using the Conforming Jumbo Loan and 20% down.  Compared to 2010, closed homes in this segment are down 11.63%, and the homes are taking 43 days longer to sell on average.  The average sale price is up 1.25%, and at the same time the average size of the home sold decreased 4.67%.  As a result, the average price per square foot is Up 9.68%. So far this year, 14.47% of the sales in this market segment have been distressed, mostly short sales or bank owned.  In this market segment the buyers appear to be favoring homes which are upgraded and this may explain the increase in average price per square foot during a period when sales volume is down.  This segment also has the smallest percentage of observed distressed sales

Homes priced between $912,001 and $2,000,000  represent those homes which are purchased with Jumbo loans with down payments of 20 to 25%.  Compared to  2010, closed homes in this segment are down 7.56%, the average price per square foot is Up slightly 0.27%, and homes are selling more quickly… about 14 days less on average.  So far this year, 18..18% of the sales in this market segment have been distressed sales, mostly short sales or bank owned.

So, segment-by-segment, one can see that 2011 remains a “mixed bag” of results.  Homes priced under $521,250 remain the hottest segment in Huntington Beach in comparison to 2010 in terms of sales volume (demand); however, this is also the segment with the most distressed sales.  The buyers in this segment are locking in net payments at or near the rental value of these homes.  Investors are also picking up these lower end homes as rentals with cash-on-cash returns in the 5+% range. 

Would anyone like a 30 Year Fixed Mortgage around 4%?  Interest rates have fallen significantly in recent weeks to a level below the 40 year low seen in November 2010.  Presently activity levels in the market place are increasing including property showings and activity at Open Houses.  The very low mortgage rates may help the 4th Quarter Sales may be stronger than recent years (if the interest rates remain low).

Scot Campbell 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.  On his website you can search for homes and obtain an instant home value report: www.RealtyDigestOnline.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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