REAL ESTATE MARKET REPORT
REAL ESTATE PRICES INCH UPWARD AS BUYERS RETURN TO THE COASTAL MARKET
SOUTHERN CALIFORNIA HOME SALES INCREASE OVER 15%
While the median sales price increased a modest 1.7% from April to May 2012, the number of Southern California home sales increased by a shocking 15.1%! This is a jump of 20.6% from May of 2011, and is a positive sign that the Southern California real estate market may have officially rebounded.
A total of 22,192 real estate sales were recorded throughout the 6 counties in Southern California, for the month of May 2012. It's important to note that all 6 counties contributed to this real estate sales figure, with 5 out of the 6 Southern California counties recording double digit increases in May 2012.
REAL ESTATE INVESTORS CONTINUE TO DOMINATE SO CAL SALES
Although the non-owner occupied sales figures decreased slightly from April to May, Southern California real estate investors and vacation home buyers continued to dominate the market, and accounted for 27% of all Southern California real estate sales in the month of May, 2012. This figure remains at nearly record breaking levels, and approximately 10% higher than the 12 year average (17.2%) for this type of home buyer, known as an absentee buyer.
The increased Southern California real estate investor activity has made it difficult for traditional home buyers to get their foot in the door... literally. In speaking with Southern California home buyers, you'll find that they're all complaining about the same 2 issues:
1) Lack of Southern California homes and condos for sale
2) Losing their dream home to a buyer that paid cash
The lack of inventory of homes and condos for sale in Southern California is putting upward pressure on real estate sales prices in certain communities that I track, particularly in Orange County, California. However, this is creating issues when it comes to appraising a property, as appraisers are reluctant to use a real estate market rebound or positive market correction as a basis for an increase in appraised value. At least they're not willing to put this in writing, just yet.
SOUTHERN CALIFORNIA DISTRESSED SALES PERSIST BUT SHIFT TOWARDS SHORT SALES
While the total number of distressed real estate sales remained above average levels, and accounted for 44.8% of all Southern California real estate sales in May, 2012, there has been an obvious shift from foreclosures to short sales. In addition, and, as I always mention, these figures need to be considered in the right context; Most traditional homeowners, with equity, will not put their home on the market until the media begins to report that the water is warm and it's safe to come in. Additionally, there are a lot of homeowners that are not distressed, who would love to move up or just move. However, they don't have enough equity to sell their home and cover the costs and fees associated with the sale, and have enough left over for a down payment on their next home. When, and if, either of these 2 groups decide that the time is right to sell, we will see a change in the percentage of standard home sales versus distressed home sales.
Lenders continue to improve upon their short sale procedures and new government regulations have been put in place to further reduce the lengthy short sale process. Due to these changes, banks have made a noticeable shift in their practices, and are relying less and less on foreclosures, to remedy delinquent home loans. We should expect to see further reductions in foreclosure sales in coming months, with the number of short sales continuing to increase in the future.
SOUTHERN CALIFORNIA PREFERRED PURCHASING METHODS IN MAY 2012
The use of Adjustable Rate Mortgage loans (ARMs) decreased once again, compared to last month's figure of 7%, and 8.8% in May, 2011.
Jumbo Loans:
The use of Jumbo loans continued to increase month over month, and the year over year figures showed a 2% increase; 18.3% of all Southern California real estate sales were made with a jumbo loan in April, 2012, and 17.1% of buyers used a jumbo loan in May of 2011.
Cash Purchases:
Cash sales decreased from 32.2% in April, but remains near record breaking levels and was the most widely used method of financing for real estate purchases in the month of May, 2012. There were 29.2% recorded cash sales in May of 2011.
FHA Loans:
The use of FHA loans held steady from April to May, However, on a year over year basis, the use of FHA loans has dropped over 4% since May of 2011, when 33.5% of all buyers used FHA loans to finance their homes.
SOUTHERN CALIFORNIA REAL ESTATE ACTIVITY FOR APRIL 2012 COMPARED TO APRIL 2011
5 out of the 6 Southern California counties posted an increase in real estate sales from April to May, 2012.
4 out of the 6 Southern California counties posted an increase in the median sales price from April to May, 2012:
-
Ventura County’s Real Estate Sales Increased +43.3%
-
Ventura County’s Median Sales Price Decreased -.10%
|
May 2011 # of Sales |
May 2012 # of Sales |
|
693 |
993 |
|
May 2011 Median Sales Price |
May 2012 Median Sales Price |
|
$360,500 |
$360,000 |
-
Los Angeles County’s Real Estate Sales Increased +25.3%
-
Los Angeles County’s Median Sales Price Decreased –1.6%
|
May 2011 # of Sales |
May 2012 # of Sales |
|
5,983 |
7,496 |
|
May 2011 Median Sales Price |
May 2012 Median Sales Price |
|
$320,000 |
$315,000 |
-
Orange County’s Real Estate Sales Increased +23.1%
-
Orange County’s Median Sales Price Increased +2.4%
|
May 2011 # of Sales |
May 2012 # of Sales |
|
2,664 |
3,279 |
|
May 2011 Median Sales Price |
May 2012 Median Sales Price |
|
$425,000 |
$435,000 |
-
San Diego County's Real Estate Sales Increased +21.5%
-
San Diego County's Median Sales Price Increased +3.2%
|
May 2011 # of Sales |
May 2012 # of Sales |
|
3,087 |
3,750 |
|
May 2011 Median Sales Price |
May 2012 Median Sales Price |
|
$324,500 |
$335,000 |
-
Riverside County’s Real Estate Sales Increased +9%
-
Riverside County’s Median Sales Price Increased +4.1%
|
May 2011 # of Sales |
May 2012 # of Sales |
|
3,644 |
3,972 |
|
May 2011 Median Sales Price |
May 2012 Median Sales Price |
|
$197,000 |
$205,000 |
-
San Bernardino County’s Real Estate Sales Increased +16.3%
-
San Bernardino County’s Median Sales Price Increased +5.7%
|
May 2011 # of Sales |
May 2012 # of Sales |
|
2,323 |
2,702 |
|
May 2011 Median Sales Price |
May 2012 Median Sales Price |
|
$150,000 |
$158,500 |
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