SoCal Sales and Median Price Fall in July

July sales traditionally fall from June however a nearly perfect storm of elements combined last month to produce one of the worst Julys on record. I say “nearly” because interest rates are still fantastic and we can only imagine how ugly it may have been if the cost of money had gone up as well. 

  Sales Volume Median Price
All homes Jul-09 Jul-10 %Chng Jul-09 Jul-10 %Chng
Los Angeles    8,082 6,515 -19.4% $321,000 $339,000 5.6%
Orange         3,128 2,527 -19.2% $420,000 $450,000 7.1%
Riverside      4,699 3,529 -24.9% $185,000 $200,000 8.1%
San Bernardino 3,549 2,556 -28.0% $140,000 $155,000 10.7%
San Diego      3,809 3,070 -19.4% $320,000 $338,000 5.6%
Ventura        837 749 -10.5% $375,000 $370,000 -1.3%
SoCal          24,104 18,946 -21.4% $268,000 $295,000 10.1%

With record low interest, falling prices and an increase in inventory there is great opportunity for well qualified buyers. Even with a potential double-dip in property value, the amount saved in interest should more than balance out.  As the saying goes, you make money when you purchase real estate and with the abundance of distressed properties out there and buyers’ market environment, there is plenty of opportunity.

Cash buyers are definitely is the best position to take advantage, whether changing a primary residence or considering income properties. There’s a lot of single, multi-family and vacation homes currently on the market that have the potential to cover some or all of the cost of ownership. In the best case scenarios owners will see positive cash flow. There some situations where financed income properties can produce a profit, however these are generally larger and much more complex investment s than say 3 to 10 unit properties.

Whether buying and especially if selling, know you market. Be patient and understand what constitutes the best value in your chosen area. The most important thing for a seller now is to be realistic and understand that their home may be worth much more to them than the market will bear.

My job as is to educated my clients so that they know the right deal when it comes along.

For more information regarding this post or other real estate information visit LARealEstateINFO.net or contact Robert Dixon at RE/MAX Palos Verdes Realty, Telephone (310) 703-1848 or email info@robertdixon.net. Content of this or any other post is presumed to be accurate but not guaranteed. DRE License #01828273

Serving the Palos Verdes Peninsula & South Bay Beach Cities, Hollywood and the Hollywood Hills, Silver Lake, Echo Park – Angelino Heights, Los Feliz, the Greater Los Angeles area and Palm Springs.

Southern California Home Sales and Median Price Dip in July

August 17, 2010

La Jolla, CA—Southland home sales saw their biggest year-over-year drop in more than two years last month as the market lost most of the boost from the federal home buyer tax credits. The median sale price dipped for the second month in a row, the result of a shaky economic recovery, continued uncertainty about jobs, and the expiring tax breaks, a real estate information service reported.

A total of 18,946 new and resale homes were sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in July. That was down 20.6 percent from 23,871 in June, and down 21.4 percent from 24,104 for July 2009, according to MDA DataQuick of San Diego.

This was the slowest July since 2007, when 17,867 homes were sold, and the second-slowest since July 1995, when 16,225 sold. Last month’s sales were 27.4 percent lower than the July average of 26,085 sales since 1988, when DataQuick’s statistics begin. The average change in sales between June and July is a 6.7 percent decline – about one-third the drop seen this year.

Last month’s 21.4 percent sales drop from a year ago marked the steepest year-over-year decline for Southland sales since March 2008, when sales fell 41.4 percent.

“It appears some of the sales that normally would have occurred in July were instead tugged into June or even May as buyers tried to take advantage of the expiring tax credits. Some of last month’s underlying technical numbers were largely flat, indicating that the market is treading water,” said John Walsh, MDA DataQuick president.

“We do expect some sideways buying and selling to kick in, especially among homeowners who have owned for more than seven years and didn’t take out equity during the frenzy. You may have to ‘discount’ your self-perceived home value, but if the person you’re buying from has to do the same thing, it doesn’t matter. And you may get a spectacularly low mortgage rate.”

The median price paid for a Southland home was $295,000 last month. That was down 1.7 percent from $300,000 in June, and up 10.1 percent from $268,000 for July 2009. The low point of the current cycle was $247,000 in April 2009, while the high point was $505,000 in mid 2007. The median’s peak-to-trough drop was due to a decline in home values as well as a shift in sales toward low-cost homes, especially foreclosures.

Foreclosure resales accounted for 34.2 percent of the resale market last month, up from 32.8 percent in June but down from 43.4 percent a year ago. The all-time high was February 2009 at 56.7 percent, DataQuick reported.

Government-insured FHA loans, a popular choice among first-time buyers, accounted for 36.0 percent of all mortgages used to purchase homes in July, down from 38.8 percent in June and 39.2 percent in July 2009.

Last month 21.9 percent of all sales were for $500,000 or more, compared with 21.6 percent in June and 19.2 percent a year ago. The low point for $500,000-plus sales was in February 2009, when 13.6 percent of sales crossed that threshold. Over the past decade, a monthly average of 25.4 percent of homes sold for $500,000 or more.

Viewed a different way, Southland zip codes in the top one-third of the housing market, based on historical prices, accounted for 30.8 percent of existing single-family house sales last month, up from 30.4 percent in June and 27.7 percent a year ago. Over the last decade those higher-end areas have contributed a monthly average of 33.3 percent of regional sales. Their contribution to overall sales hit a low of 21.0 percent in January 2009.

High-end sales would be stronger if adjustable-rate mortgages (ARMs) and “jumbo” loans were easier to obtain. Both have become much more difficult to get since the credit crunch hit three years ago.

Last month ARMs represented 6.1 percent of all purchase loans, down from 6.7 percent in June but up from 3.4 percent in July 2009. Over the past decade, a monthly average of nearly 40 percent of all home purchase loans have been ARMs.

Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for 18.4 percent of last month’s purchase lending, up from 17.6 percent in June and from 15.2 percent in July 2009. Last month’s figure was the highest since January 2008, when it was 18.7 percent. Before the August 2007 credit crisis, jumbos accounted for 40 percent of the market.

Absentee buyers – mostly investors and some second-home purchasers – bought 21.9 percent of the homes sold in July, paying a median of $220,000. Buyers who appeared to have paid all cash – meaning there was no indication that a corresponding purchase loan was recorded – accounted for 26.7 percent of July sales, paying a median $218,250. In February this year cash sales peaked at 30.1 percent. The 22-year monthly average for Southland homes purchased with cash is 14.2 percent.

The “flipping” of homes has trended higher over the past year. Last month the percentage of Southland homes flipped – bought and re-sold – within a six-month period was 3.7 percent, while in June it was 3.4 percent and a year ago it was 2.0 percent. Last month flipping varied from as little as 2.8 percent in Orange County to as much as 4.4 percent in Los Angeles County.

MDA DataQuick, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates, monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

The typical monthly mortgage payment that Southland buyers committed themselves to paying was $1,204 last month, down from $1,251 in June, and up from $1,180 in July 2009. Adjusted for inflation, current payments are 46.4 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They were 56.1 percent below the current cycle’s peak in July 2007.

Indicators of market distress continue to move in different directions. Foreclosure activity remains high by historical standards but is lower than peak levels reached over the last two years. Financing with multiple mortgages is low, down payment sizes are stable, and non-owner occupied buying is above-average, MDA DataQuick reported.

Source: DQNews.com

More on the Home Buyer Tax Credit Deadline Extension

More details of the extended tax credit for first-time and move-up home buyers deadline that the Senate voted to extend to SEPTEMBER 30, 2010.

As part of its plan to stimulate the U.S. housing market, Congress last fall approved the Extended Home Buyer Tax Credit. This extended the deadline for the First-Time Home Buyer Tax Credit from Nov. 30, 2009, to April 30, 2010, and NOW potentially until SEPTEMBER 30, 2010. It was also expanded it to include repeat buyers.

Home buyers may get more time to claim tax credit
MarketWatch June 18, 2010
By Amy Hoak , Real Estate writer

For some people angling to claim the home-buyer tax credit, hiccups in getting to the closing table are threatening to disqualify them from getting the incentive. But a Senate amendment to the American Jobs and Closing Tax Loopholes Act of 2010 would give them more time to finalize the sale.

To qualify for the credit, buyers had to be under contract for a purchase by April 30. But under current law they have until June 30 to close on the sale.

Under the amendment, they would get an extra three months to close — useful for those who are experiencing delays in getting their mortgages approved or are somehow being affected by the many other issues that can arise and prevent a closing from occurring on time. The amendment would apply solely to buyers who entered a purchase contract by April 30.

“Because of this program’s popularity and the time it takes to complete transactions such as short sales, I led the effort today to extend the closing deadline for this tax credit through September of this year — allowing lenders more time to clear a backlog of 180,000 potential home buyers nationwide,” said Senate Majority Leader Harry Reid, in a news release after the amendment passed in the Senate this week.

Still, the measure is only one part of a wide-ranging jobs and tax bill that still needs to be voted on by both chambers of Congress before it would become law.

Many in the industry are concerned that some buyers won’t make the current deadline, especially due to the extra time it takes to get a final mortgage approval these days, combined with the high volume of loan applications in process for purchase and refinance mortgages, due to low interest rates.

According to the National Association of Realtors, as many as one-third of qualified home buyers have been told by their lenders their mortgages won’t close before June 30 because of the volume of applications being processed.

“These are not buyers who just entered into the market. These are buyers who previously met all the qualifications for the tax credit, but find themselves at the mercy of a work-flow jam with the lenders or other delays and might not be able to complete the purchase of their homes,” said Vicki Cox Golder, NAR’s president, in a news release. “Since these applications were already in the pipeline and figured into the program’s cost, the extension of the closing deadline should not incur any further government costs.”

For more information regarding this post or other real estate information contact Robert Dixon at RE/MAX Palos Verdes Realty (310) 703-1848 or email info@robertdixon.net. Content of this or any other post is presumed to be accurate but not guaranteed.