Southern California home sales off to wobbly start (?)
An article by Gregory J. Wilcox, Los Angeles Daily News, 02/12/14
“Southern California’s residential housing market got off to a wobbly start in 2014, and is still feeling the effect of the drag from last year, a market tracker said Wednesday.
Buyers still face a smaller inventory, higher prices, rising interest rates and a lack of bargain-priced foreclosed homes, said La Jolla-based DataQuick.
Last month there were 14,471 sales on new and previously-owned homes in the six county region, which was down 21 percent from 18,415 in December and down 10 percent from 16,058 a year earlier.
Sales were 17 percent below the average 17,493 for a January dating back to 1988, when DataQuick began tracking the marker. That is not unusual, though, since the market collapsed in the middle of the last decade.
“Sales haven’t been above average for any month in more than seven years,” said DataQuick analyst Andrew LePage.
Sales have fallen below the year-ago level for four months in a row.
“Why? We’re still putting a lot of the blame on the low inventory. But mortgage availability, the rise in interest rates and higher home prices matter too,” DataQuick President John Walsh said in a statement.
“Two of the bigger questions hanging over the housing market right now are, how much pent-up demand is left out there and will inventory skyrocket this year as more owners take advantage of the price run-up?’”
The answers won’t be known until later in the spring, he said.
The market did not vary much around the region.
In Los Angeles County the median price rose 20.5 percent to $410,000 from $340,000 a year earlier. Sales fell 7 percent to 4,913 from 5,308 in January 2013.
In San Bernardino County the median price jumped 24 percent to $220,000 from $177,500 a year earlier and sales fell 11 percent to 1,910 from 2,137.
Riverside County’s sales declined 10 percent to 2,576 from 2,858 and the median price increased 23 percent to $277,000 from $226,000.
Foreclosure sales — homes foreclosed on in the prior 12 months — accounted for 7 percent share of the resale market in January, up from 6 percent in December but down from down from 17 percent a year earlier. In recent months the foreclosure resale rate has been the lowest since early 2007, DataQuick said. They reached a high of 57 percent in February 2009.
Short sales — transactions where the sale price fell short of what was owed on the property — made up an estimated 12 percent of Southland resales last month. That was down from 13 percent the prior month and down from 24.2 percent a year earlier.
The drop in distressed property sales and rising prices eroded affordability but that seems to have stabilized in the latter part of last year, according to the Los Angeles-based California Association of Realtors.
The group said that price gains slowed in last year’s fourth quarter, which helped affordability.
During the last three months of 2013 in Los Angeles County 44 percent of households could afford a median priced home costing $423,090. In the Inland Empire 44 percent of households could afford a median priced home costing $263,580, the association said Wednesday.
Statewide, 32 percent of families could afford a median priced home costing $431,510 in last year’s fourth quarter.” ( End of Gregory’s article.)
From Bob Phillips. In my humble opinion, the market in South Orange County – where I practice – the market is a bit – not a lot, just a bit – stronger than the above article indicates, but that is frequently, if not usually, the case. While we don’t seem to have generated much traction, there is still an increase of activity since the Super Bowl, which I expect to continue. While I do NOT expect accelerating prices like we experienced in 2013, I DO expect rather typical price gains in the +-5% range. Many local experts/prognosticators have a similar opinion.
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