For
immediate release
Business editors/real estate writers
Southern California Home Sales and Median Price Dip in
July
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.
(chart)
All
Homes #Sold
#Sold Pct. $Median
$Median Pct.
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% |
Source: MDA DataQuick,
DQNews.com
-30-
Media calls: Andrew LePage
(916)456-7157