Time to get out the crystal ball or the Ouija Board and make some sense of what is happening in the Pasadena Housing Market. Sales results for May indicate that fewer homes are being sold this year versus last, and down considerably when compared to May 2004. It is also taking longer to sell a home today than it did just 12 months ago.
One thing I learned early in my career is that you can spin data in any number of ways to get a desired effect. When you look at fewer homes being sold and the ones that are being sold are taking longer to sell, I have a hard time supporting the theory that prices are still going up. The other justification is that in May ‘07 houses sold for 98.6% of their asking price as compared to May ‘06, when they sold slightly over asking price at 100.45%.
To understand the increase in the average and median sale prices, look at what is being sold. Many fewer 2 bedroom units were sold last month, however there was a large increase in the number of homes that did sell over $1,000,000, which inflated the sales prices. This supports my earlier assumption that weakness in the housing market is due to the sub-prime lending situation effecting many would be home owners in the lower priced brackets.
The graph below shows the four geographical area's as reported by the Pasadena Association of Realtors, showing where houses have sold and at what price range.
May is usually the time the housing market kicks into high gear. There has been a lot of news lately about our strong economy and the FED remaining firm on interest rates. I think when people begin seeing interest rates on the rise they take a wait and see attitude, as opposed to going out and locking in a rate. Even though our market here is slower than most homeowner's would wish for, it is still much better than other parts of the country.
<!-- -->
Comments(0)