Southern California home sales were the highest for an August in
seven years as strong activity above $300,000 compensated for a dip in
sales below that level, as well as fewer cash and investor purchases.
The median sale price held steady compared with June and July but rose
24.6 percent from a year earlier, marking the eighth consecutive month
with a year-over-year gain over 20 percent, a real estate information
service reported.
A total of 23,057 new and resale houses and condos sold in
Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange
counties last month. That was down 0.8 percent from a revised 23,253
sales in July, and up 2.8 percent from 22,438 sales in August 2012,
according to San Diego-based DataQuick.
Last month’s sales were 12.8 percent below the average
number of sales – 26,452 – in the month of August since 1988, when
DataQuick’s statistics begin. Southland sales haven’t been above average
for any particular month in more than seven years. August sales have
ranged from 16,379 in August 1992 to 39,562 in August 2003.
The median price paid for all new and resale houses and
condos sold in the six-county region last month was $385,000, the same
as in June and July and up 24.6 percent from $309,000 in August 2012.
The $385,000 median over the past three months is the highest since
April 2008, when the median was also $385,000.
The median price has risen on a year-over-year basis for 17
consecutive months. Those gains have been double-digit – between 10.8
percent and 28.3 percent – over the past 13 months. Last month’s 24.6
percent annual gain in the Southland median was lower than the 28.3
percent annual increase in June and the 25.8 percent annual gain in
July.
Last month’s median remained 23.8 percent below the peak
$505,000 median in spring/summer 2007. The median fell by $256,000 from
that peak to its $249,000 trough in April 2009, and it has now regained
just over half of that peak-to-trough loss.
In a sign of continued market confidence, Southern
California home buyers continue to put near-record amounts of their own
money into residential real estate. In August they paid a total of $4.68
billion out of their own pockets in the form of down payments or cash
purchases. That was down from a revised $5.18 billion in July and up
from $4.24 billion a year ago. The out-of-pocket total peaked this May
at $5.41 billion.
“There’s something for everyone in today’s housing data.
Sellers have seen an amazing price jump from just a year ago, allowing
many to finally sell at a profit. Home shoppers have more properties to
choose as we begin to see a ‘supply response’ to higher values. Price
pressures appear to be easing, though, amid higher mortgage rates, more
supply and fewer cash and investor purchases. As we head into fall and
winter, a slower time of year, we’ll probably see year-over-year price
gains continue to taper,” said John Walsh, DataQuick president.
It appears that most of last month’s 24.6 percent
year-over-year increase in the Southland median sale price reflects
rising home prices, while a small portion reflects a change in market
mix. (This change consists of a big increase in mid- to high-end sales
and a big decline in sales of lower-cost distressed properties.)
In August, the lowest-cost third of the region's housing
stock saw a 23.3 percent year-over-year rise in the median price paid
per square foot for resale houses. The annual gain was 21.2 percent for
the middle third of the market and 17.4 percent for the top,
most-expensive third.
Sales activity in the middle and upper price ranges continues to far outpace sales in the more affordable markets.
Last month the number of homes that sold from $300,000
through $800,000 – a range that would include many move-up buyers – rose
31.4 percent year-over-year. The number that sold for $500,000 or more
jumped 48.7 percent from one year earlier, while $800,000-plus sales
rose 48.0 percent.
In August, 32.6 percent of all Southland home sales were for
$500,000 or more, down from a revised 33.2 percent of sales the month
before and up from 23.3 percent a year earlier.
The number of Southland homes that sold below $200,000 last
month dropped 32.8 percent year-over-year, while sales below $300,000
fell 24.9 percent. Low-end sales have been relatively weak largely
because of an inadequate supply of homes for sale. Many owners still
can’t afford to sell their homes because they owe more than they are
worth, and lenders aren’t foreclosing on as many properties, further
limiting supply.
In August, foreclosure resales – homes foreclosed on in the
prior 12 months – accounted for 7.1 percent of the Southland resale
market. That was down from a revised 7.7 percent the month before and
down from 19.2 percent a year earlier. Last month’s foreclosure resale
rate was the lowest since it was 5.5 percent in June 2007. In the
current cycle, foreclosure resales hit a high of 56.7 percent in
February 2009.
Short sales – transactions where the sale price fell short
of what was owed on the property – made up an estimated 13.6 percent of
Southland resales last month. That was the lowest level since it was
also 13.6 percent in April 2009. Last month’s short sale figure was down
from an estimated 14.6 percent the month before and down from 26.6
percent a year earlier.
Absentee buyers – mostly investors and some second-home
purchasers – bought 26.3 percent of the Southland homes sold last month,
which is the lowest share for any month since it was 25.1 percent in
November 2011. Last month’s level was down from 27.4 percent the month
before and down from 27.2 percent a year earlier. The absentee share has
ratcheted down gradually each month this year since hitting a record
32.4 percent in January. The monthly average since 2000, when the
absentee data begin, is 18.3 percent. Last month’s absentee buyers paid a
median $310,000, up 31.4 percent from a year earlier.
After hitting a peak earlier this year, the share of homes
flipped has generally trended flat to lower. Last month 6.0 percent of
all Southland homes sold on the open market had previously sold in the
prior six months. That’s the same as July’s flipping rate and up from
5.1 percent a year earlier. (The figures exclude homes resold after
being purchased at public foreclosure auction sales on the courthouse
steps).
Buyers paying with cash accounted for 27.6 percent of last
month's home sales, down from 30.0 percent the month before and down
from 32.3 percent a year earlier. The cash share of purchases has
declined each month since hitting an all-time peak of 36.9 percent this
February, and in August was at its lowest level since it was 26.2
percent in September 2010. Since 1988 the monthly average for cash
buyers is 16.2 percent of all sales. Cash buyers paid a median $325,000
last month, up 31.0 percent from a year ago.
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