For
immediate release
Business editors/real estate writers
More Incremental Gains for Southland Real Estate Market
La
Jolla, CA---Home sales and prices continued their steady but pokey climb up from
the bottom in Southern California last month as buyers scrambled to take
advantage of low prices and low mortgage interest rates. The market is still
tilted toward low-cost distress sales, but not by as much as previously, a real
estate information service reported.
A
total of 20,476 new and resale homes sold in Los Angeles, Riverside, San Diego,
Ventura, San Bernardino and Orange counties last month. That was up 33.3 percent
from 15,359 in February, and up 5.0 percent from 19,506 in March 2009, according
to MDA DataQuick of San Diego.
Sales always go up from February to March. Last month was the 21st in a row with
a year-over-year sales increase. The March sales average is 24,936 going back to
1988, when DataQuick’s statistics begin.
“It’s a reflection of just how grim things got, that we’ve now had almost two
years of sales gains and we’re still 18 percent below the sales average. The
market won’t rebalance until mortgage lending patterns normalize, and that’s
just not happening yet. Some of the best deals out there right now are happening
when the buyer comes in with cash,” said John Walsh, MDA DataQuick president.
The
median price paid for a Southland home was $285,000 last month, up 3.6 percent
from $275,000 in February, and up 14.0 percent from $250,000 for March
2009.
The
median peaked at $505,000 in mid 2007 and appears, so far, to have bottomed out
at $247,000 in April last year. The peak-to-trough drop in the median 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 38.4 percent of the resale market last month,
down from 42.3 percent in February, and down from 54.8 percent a year ago. The
all-time high was in February 2009 at 56.7 percent.
As
sales of lower-cost foreclosure properties have waned over the past year,
activity has picked up from very low levels in many high-end areas. Last month
sales of homes priced at $500,000 or more made up 19.4 percent of all Southland
transactions, compared with 18.5 percent in February and 14.9 percent in March
2009. Over the past five years, $500,000-plus deals averaged 35 percent of
monthly sales, while over the past 10 years they averaged 26 percent of all
transactions.
Higher-end sales are still hampered by the troubled jumbo loan market, which has
improved only modestly over the past year. Jumbo loans, mortgages above the old
conforming limit of $417,000, accounted for 15.7 percent of last month’s
purchase lending, up from 14.8 percent in February and from 10.5 percent in
March 2009. However, before the credit crisis in the fall of 2007, jumbos
accounted for 40 percent of the market.
Adjustable-rate mortgages (ARMs) haven’t come close to recovering from the
credit crunch, either. While 44.6 percent of all Southland purchase mortgages
since 2000 have been ARMs, last month they represented just 4.8 percent, up from
4.0 percent in February and 2.1 percent in March last
year.
Meanwhile, Uncle Sam continues to prop up lending for many low-to mid-priced
homes. Government-insured FHA loans, a popular choice among first-time buyers,
accounted for 38.6 percent of all mortgages used to purchase Southland homes in
March.
Absentee buyers – mostly investors and some second-home purchasers – bought 21.3
percent of the homes sold in March.
Buyers who appeared to have paid all cash – meaning there was no indication that
a corresponding purchase loan was recorded – accounted for 27.1 percent of March
sales. In February it was a revised 30.0 percent – an all-time high. The 22-year
monthly average for Southland homes purchased with cash is 13.8 percent.
The
“flipping” of homes has also trended higher the past year, though it eased a bit
in March. Last month the percentage of Southland homes flipped – bought and
re-sold – within a three-week to six-month period was 3.2 percent of total
sales, down from 3.5 percent in February but up from 1.6 percent a year ago.
Last month flipping varied from as little as 2.6 percent of total sales in
Riverside County to as much as 3.9 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 $1,220 last month, up from $1,180 for February, and up from $1,074
for March a year ago. Adjusted for inflation, current payments are 45.2 percent
below typical payments in the spring of 1989, the peak of the prior real estate
cycle. They were 55.1 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.
Mar-09 Mar-10
Chng
Mar-09 Mar-10 Chng
Los
Angeles 5,971
6,747 13.0% $300,000
$329,000 9.7%
Orange
2,433 2,652
9.0% $385,000 $432,000
12.2%
Riverside
4,409 4,156 -5.7%
$187,000 $198,000 5.9%
San Bernardino
2,897 2,955
2.0% $150,000 $152,000
1.3%
San
Diego 3,020
3,227 6.9% $285,000
$330,000 15.8%
Ventura
776 739
-4.8% $326,000 $375,000
15.0%
SoCal
19,506 20,476 5.0%
$250,000 $285,000 14.0%
Source: MDA DataQuick,
DQNews.com
-30-
Media calls: Andrew LePage
(916)456-7157