From HW:
Home sales in Southern California grew between February and March, but remain 5.2% below year-ago levels, data firm DataQuick said Wednesday.
The La Jolla, Calif.-based research firm said home sales grew 35.1% on a month-to-month basis in March, but signs in the housing market still point to consumer resistance as the job market remains subdued.
In the counties of Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange, DataQuick reported 19,412 new and resale home sales in March, up from 14,369 in February.
Even still, that number is trending below the 20,746 sales recorded during the same period last year.
“Sales always increase from February to March,”DataQuick said in a release. “Last month’s sales count was 21.4% below the 24,706 average for all the months of March since 1988. Sales so far this year are 20% below the norm. During the last half of 2010 sales were 25% to 30% below average”
Sales of newly built homes fell to their lowest levels in 23 years last month.
Foreclosures are going to continue to plague the market “for a good while,” DataQuick concluded. However, the research firm sees “mortgage availability” as the key to unleashing a buyer’s market. Foreclosure resales made up 36.4% of all resales last month, down from 37% a month earlier.
“If a well-crafted home loan program comes down the pike, it’s going to make some lending institution the dominant player, at least for a while,” said John Walsh, DataQuick president.
In March, adjustable-rate mortgages accounted for 7.8% of last month’s purchase loans, while jumbo loans — or loans at the limit of $417,000 — made up 15.9% of March’s purchase lending, compared to 15.6% in February.
Cash purchases made up 30.5% of March home sales, with buyers paying a median of $205,250. Government-insured FHA loans represented 32% of all mortgages used to purchase homes last month.
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This year’s March sales in SoCal were 5% lower than last year?
What about the housing tax credits?
The mainstream media said that the tax credits were the cause for the rejuvenated market last tear, and just wait until this year when sales fall off a cliff.
The HW reporter only covers housing, and Dataquick…..well, all they cover is housing.
Yet nobody wants to look a little deeper at the situation, and within five minutes discover the real problem with sales today.
The ONLY reason a SoCal home doesn’t sell today is because its list price is too high – and in most cases, WAY too high.
Detached and attached March sales in San Diego County (from MLS):
| Year | # of Sales | Avg. SP | Avg. $-per-sf | SP:LP | DOM |
| 2010 | $411,249 | 99% | |||
| 2011 | $420,169 | 97% |
Year-over-year sales in March were down 6%, and the average cost-per-sf was down 4%? That’s all? The average sales price went up? Either the tax credits didn’t have much impact, or this year’s market has held up pretty good so far.
Here are today’s Active Listings in SD County:
| SD Co. | # of ACT | Avg. SP | Avg. $-per-sf | DOM |
| ACT | $705,002 |
Today’s average list price is 83% ABOVE LAST MONTH’S AVERAGE SALES PRICE, and the $$-per-sf is 34% higher. There’s no surprise that recent sales are slightly lower with this much greed in marketplace.
But the over-priced turkeys do help the good buys stand out – thank you OPTs!
If today’s sellers would get off their high horse, sales would easily surpass last year’s healthy pace.
Maybe the OPT’s are just a reflection of what it take to break even for a lot of sellers ?
I don’t think most understand that this is what will be holding back the economy until nominal prices get to where the current underwaters can break even, Just my opinion , until the majority of underwater homes are no longer underwater, (one way or the other),
There will be no economic recovery.
And the majority in this situation are not going to sell at a loss unless they are forced to. And most are not going to be forced to.
And so we sit,
I am currently trying to buy a house in Palos Verdes and the choices are limited. Many are priced at the loan value on the home, but are 15 to 20% over their real value. And many have delayed maintenance problems. Frustration doesn’t express how I feel.
I thought the other interesting comment was they blamed the low sales on mortgage availability. Should that read lack of credit qualified buyers? If what is needed is people with Fico 600 and no money down to kick start this market we are in a lot of trouble.
Jim I think you would agree with me that those are likely not the people who should be buying the average $705K listed home.
Yes, I definitely agree.
Trying to tempt everyone into buying a home doesn’t work, and we have ample evidence to substantiate that by now.
Whenever you hear somebody blame low sales on tight money, they obviously aren’t in the game (which includes most realtors – the ones hitting the coffee and donuts while complaining about the market all day, instead of working).
I don’t think anyone wants to go back to if you can breath you can qualify , but at the same time we (the economy ) are not going anywhere until we get back close to nominal peak pricing,
From the look of it, that may be a while yet.
Also back when the bankers should have been tight, they were obviously too lose,
Now actually I think they could afford to be a lot loser especially in the area’s that were disseminated like TV.
No one seems to be thinking it seems, just reacting.
Jiji
I think the economy is in a lot of trouble if we go back to peak nominal pricing in the short run. I feel very bad for families who would have to sacrifice just to make a mortgage payment. That is very bad for America and the American family.
Next, the government makes most mortgage loans. FNM, FRE, and the FHA are still losing a lot of money. If anything, since these companies cannot break even mortgage criteria is too loose not too tight. Why do traditional banks not make mortgage loans, because they cannot complete with the government which makes money losing mortgage loans.
Jim is right, homes will sell and Americans will be better off if people set realistic prices and do not depend on their shelter to support their consumer lifestyle.
Not saying we will be going back to peak pricing anytime soon, just that we will not be having a robust economic recovery until or unless they do (go back to near peak pricing),
Ironically it is the lower middle income who are suffering the most in this recession; I think this is why the middle to higher end is stickier.
And they really could and need to loosen the lending requirements for the lower end homes.
I’d have to say things look good when you factor in the lack of the tax credit. I figure if you break the sales down by region you’d see areas effected by the tax credit down close to 10% in number of sales while the affluent NCC has probably gained a few percent YoY making the county number look pretty good. It’s been a pretty good economic recovery if you’re in the have boat.
As for pricing we continue to have a standoff. If prices were to start falling I think sellers would probably chase it down but as long as it stays in this relatively narrow band of +/- 5% I think both sides won’t be willing to budge and we’ll continue to see what we have been. The buyers out there will continue to wait for the trickle of well priced inventory and will continue to be picky. Some buyers won’t meet a sellers price because they financially can’t others won’t out of a matter of principal.
I think Livingincali is right, the market mix is behind the stagnation and not pricing. JtR is right also about the the availability of loans.
And here is another thought; San Diego March 2010 Median Sales Price = $330K. In 2011 it was $325K. The tax credit, (federal alone), was $8,000. Meaning those who bought at what would seem to be an inflated market really came out pretty good considering interest rates and if they were able to tap into the California tax credit.
Now it will be interesting to see what gas prices do to home values with longer commutes.
Robust economic recoveries are not dependent on home prices. It is gives a consumption les sugar high as people borrow against their homes and buy big TVs. Sugar highs almost always seem to lead to crashes. A situation that leads to a crash is not what I call a robust recovery.
When your under water you can’t sell, you can’t sell you can’t move, you cannot upgrade, cannot relocate, you will not buy new stuff for new homes, in essences when homes are stuck the economy is stuck.
They can rent. If the only hope for the economy is to create high home prices so that new young families can go deeper into debt (bailing out the existing over leveraged), then there are bigger structural issues in the economy.
Not saying home prices are going back to peak anytime soon, just saying don’t expect a strong economic recovery.
Again ironically it is the lower middle income who are suffering the most.
Also don’t expect the Gov efforts to re-flate to end until we get there again (peak), they really cannot stop, the other option is depression.
Iceland a small non dynamic economy had their whole banking system collapse and their currency lost 75% of its value in a week during 2008. Wow they must still be in a depression, right, nope they have a growing economy.
Trying to maintain the staus quo is hurting the US economy and the lower middle class. Lower home prices would allow families to have less debt. Lower home prices would signal us to produce something other than over-supplied homes creating more jobs. The choice is slow growth and suffering or a dynamic economy.
A depression is BS sold by people who have a lot of money invested in the status quo.
“Iceland a small non dynamic economy had their whole banking system collapse and their currency lost 75% of its value in a week during 2008”
There you just said it!!!
I bet their homes are going for more than they were before the collapse !!
2008–2011 Icelandic financial crisisFrom Wikipedia, the free encyclopediaJump to: navigation, search
An Icelandic 1000-krónur note. The value of the Icelandic króna declined significantly during 2008.
Economic growth in Iceland, Denmark, Norway and Sweden from 2000 to 2007. Iceland is in red.The 2008–2011 Icelandic financial crisis is a major ongoing economic and political crisis in Iceland that involves the collapse of all three of the country’s major commercial banks following their difficulties in refinancing their short-term debt and a run on deposits in the United Kingdom. Relative to the size of its economy, Iceland’s banking collapse is the largest suffered by any country in economic history.[1]
In late September 2008, it was announced that the Glitnir bank would be nationalised. The following week, control of Landsbanki and Glitnir was handed over to receivers appointed by the Financial Supervisory Authority (FME). Soon after that, the same organisation placed Iceland’s largest bank, Kaupthing, into receivership as well. Commenting on the need for emergency measures, Prime Minister Geir Haarde said on 6 October, “There [was] a very real danger … that the Icelandic economy, in the worst case, could be sucked with the banks into the whirlpool and the result could have been national bankruptcy.”[2] He also stated that the actions taken by the government had ensured that the Icelandic state would not actually go bankrupt.[3] At the end of the second quarter 2008, Iceland’s external debt was 9.553 trillion Icelandic krónur (€50 billion), more than 80% of which was held by the banking sector.[4] This value compares with Iceland’s 2007 gross domestic product of 1.293 trillion krónur (€8.5 billion).[5] The assets of the three banks taken under the control of the FME totaled 14.437 trillion krónur at the end of the second quarter 2008.[6]
The financial crisis has had serious consequences for the Icelandic economy. The national currency has fallen sharply in value, foreign currency transactions were virtually suspended for weeks, and the market capitalisation of the Icelandic stock exchange has dropped by more than 90%. As a result of the crisis, Iceland is currently undergoing a severe economic recession; the nation’s gross domestic product decreased by 5.5% in real terms in the first six months of 2009.[7] The full cost of the crisis cannot yet be determined, but already it exceeds 75% of the country’s 2007 GDP.[citation needed] Outside Iceland, more than half a million depositors (far more than the entire population of Iceland) found their bank accounts frozen amid a diplomatic argument over deposit insurance. German bank BayernLB faces losses of up to €1.5 billion, and has had to seek help from the German federal government.[citation needed] The government of the Isle of Man will pay out half of its reserves, equivalent to 7.5% of the island’s GDP, in deposit insurance.
OK It seems they are still having a very hard time over there, but I bet in Iceland Dollars their homes cost more Iceland dollars than they did before 2008 .
OK I stand corrected, Iceland homes are still down about 50% from peak, but I would hardly call their economy robust.
As long as you like fish and reindeer I guess you will do OK though.
One more comment on Iceland, it is a very small country in terms of population, it’s about 320 thousand, (about the size of Temecula valley). And is really owned my the much larger economic power Demark. So a lot of issues can get paved over easily.
I never said robust, but not a great depression. Those were the two choices you gave. A little research shows 50% lower prices yields the same economy as the US with a much smaller drop.
Will I guess if North County SD secedes (it would still be about 5 time larger than Iceland) ,
We could do the same thing.
Asking the irrational to suddenly become rational is wishful thinking. I just got back from Italy after leaving in 2008 because (we) couldn’t afford to live here. So we left to allow for things to cool off…
-I remember when I made the decision I had been active on real estate blogs, reading what professionals and other folks were talking about. Just before I gave up I remember making this post as “Chunkymutt” http://www.sandiegohomeblog.com/2006/12/03/pollyanna-returns/
-I guess my point is this, some of the people that would like to purchase a home in SD county are ready. Cash in hand, financing OK, credit OK…just not ready bail out people who made irrational decisions, and not prepared to transfer wealth from my family to some old-retired jerk, who is trying to sell a house he purchased in 1974 for 80K,(no updates or changes to the property) now trying to sell it for 800K, see ya at your estate sale pops! If you look at the Carlsbad market (specifically) buyers are sitting on the sidelines because any home that has potential, is way over priced. The only homes in Carlsbad that are for sale under 600K are homes that have been so torn up that you’d have to dump an additional 100K into it, tear up shag rugs, remove pop corn cielings, remove stock 1959 fixtures, you know what i mean. I put a bid on the home on Valley street that looked like a clown family had been living in it, my offer of 420K was refused, instead, the owners are willing to offer owner financing…that’s what I call really desperate! Oh well, I told the real estate agent I’d be back in 6 months to buy it for 400K.