Add another data point to housing’s ongoing bounce along the market bottom.
Sales activity of existing homes in San Diego County slipped on a monthly basis in October, falling roughly in line with its year-ago level, according to recent data.
The San Diego Association of Realtors (SDAR) reported that buyers purchased 2,292 total homes last month, virtually unchanged from the 2,297 sold last October but down 9 percent from a month earlier.
Of the homes sold in October, 1,546 were single-family homes. The single-family total is 10 percent fewer on a monthly basis but 3 percent above October 2010.
The 746 condos sold last month represented declines of 6 percent from both the previous and year-ago months.
Among single-family homes, the median sales price — measuring only the cost of the median home of all properties sold during the defined period, rather than a broad change in housing values –fell 1.3 percent from September and 7.6 percent from last October, to $355,000.
The median condo sold for $207,500, down 1.1 percent from September and 2.8 percent from last October.
The most pronounced change in the SDAR numbers, on an annual basis, is the average time properties spent on the market last month. Single-family homes sold in an average of 91 days, 18 percent more than the 77 average days spent on market last year, and 12 percent more than a month earlier.
The for-sale inventory, especially on the low end of the market, has grown picked over as the distressed properties in the best condition are quickly snatched up after going on the market. Making matters worse, sellers who would typically be looking to enter the move-up market have abstained due to low prices and an unstable labor market.
“People go out and they get very discouraged looking at what’s on the market,” said Alan Nevin, principal of The London Group Realty Advisors last week, reached last week to discuss housing affordability in San Diego. “The number of listings of homes under 500 in acceptable areas is negligible.” (I think he means under $500,000)
Russ Valone, president and CEO of MarketPointe Realty Advisors, said the increasing prevalence of short sales might also account for the rising days spent on market average.
The average is calculated from the time a property is listed to the time it closes, not when it enters escrow. The notoriously lengthy transaction timeline of short sales could push up the average, even if other properties aren’t necessarily spending additional time on the market.
(JtR: The paragraph above is inaccurate, the DOM is calculated from listing date to pending date)
Short sales account for roughly 8 percent of all home sales this year, up from 7 percent in 2010, 5.5 percent in 2009 and 3 percent in 2008, according to CoreLogic.
Valone said the increasing share of short sales is also in part responsible for the softness in prices. “We’ve been bumping along the bottom for a good year,” he said. “Look at housing market, and softness, has little to do with housing, has to do with larger macroeconomics.”
The market needs echo boomers — children of baby boomers — to leave the rental market and become home buyers, according to Valone.
As long as the labor market remains weak, though, they’ve opted for flexibility over building equity.
“People who don’t own now should be coming into the market with zeal, with good interest rates and prices, and instead they’re saying ‘I don’t know if I’ll be full-time employed in San Diego,’ so they want the flexibility that staying in the rental market affords them,” he said.
While some analysts’ predictions have surpassed the general forecast that prices won’t fall more than another few percentage points, and have suggested they could come down as much as another 7 percent, those losses still don’t represent a great deal of money in the long run, according to Valone. More than a fear that values are still on the way down, it’s a fear of the current labor market that’s keeping young would-be buyers on the wrong side of the fence, he said.
“Housing won’t lead us out,” he said. “Instead of it being the lead engine pulling the train, it’ll be in the back pushing the train.”
Through ten months, total home sales have slipped 3 percent from last year, when the homebuyer’s tax credit propped up sales early in the year, led primarily by a decline in condo sales.
County buyers have purchased 8,902 condos this year, down 8.3 percent from the year-ago period’s 9,709.
Meanwhile, 17,565 single-family homes have been sold this year, down less than a percent from last year’s 17,603.
The average days on the market for the entire year among single-family homes has increased 13 percent, from 74 to 84, while condos are now spending an average of 96 days on the market, up 14 percent from 84 during the first 10 months of 2010.
The median sales price of a single-family home sold this year, $368,000, is 4 percent less than the median home’s price last year. In the condo market, the median price has fallen 5 percent to $207,500.
Now that there are so many companies reporting sales and pricing, the numbers tend to vary.
I don’t know where CoreLogic gets their “8% of sales this year were short sales”. Of the detached and attached home sales in San Diego County this year, the MLS shows that 21% have been short sales, and 23% have been REO sales.
San Diego County sales counts for first ten months (1/1 – 10/31)