Buying in SoCal: a summer market update

SoCal | market trends

Average sales price
The median price paid for a home in the six-county Southland rose last month to $295,000, up 1.7 percent from $290,000 in April and up 5.4 percent from $280,000 in May 2011, according to San Diego-based DataQuick. Last month’s median was the highest since the median was $295,500 in September 2010. The year-over-year gain in the May median followed a 3.6 percent annual increase in April. Before then, the median had fallen year-over-year for 13 straight months.

Average mortgage payment
The typical monthly mortgage payment Southland buyers committed themselves to paying last month was $1,100, compared with $1,096 the month before and $1,154 a year earlier. Adjusted for inflation, last month’s typical payment was 53.6 percent below the typical payment in the spring of 1989, the peak of the prior real estate cycle. It was 62.0 percent below the current cycle’s peak in July 2007. 

Who is buying?
Absentee buyers – mostly investors and some second-home purchasers – bought 27.0 percent of the Southland homes sold last month. That was down from 28.4 percent the prior month and up from 25.1 percent a year earlier. The record was 29.9 percent in February this year, while the monthly average since 2000 is 17.2 percent. Last month’s absentee buyers paid a median $225,000, up from $220,000 the month before and $212,500 a year earlier. Investor and cash-only home purchases remain near record levels. 

How are they buying?
Buyers paying with cash accounted for 31.3 percent of May home sales, down from 32.2 percent the month before and up from 29.2 percent a year earlier. Cash purchases peaked at 33.7 percent of all sales this February, and since 2000 the monthly average is about 15 percent. 

Government-insured FHA loans accounted for 29.4 percent of all purchase mortgages last month. The FHA level a year earlier, in May 2011, was 33.5 percent. Adjustable-rate mortgages (ARMs) trended lower last month, accounting for 6.7 percent of May’s home purchase loans. Since 2000, a monthly average of about 36 percent of purchase loans were ARMs.

Orange County|market trends

As of July 2012 available single family home inventory in Orange County stood at 10,845 units, a 1.3% decrease reflecting no change since the week before. Average sales price stood at $440,000. Year-to-date, Orange County sales increased 1.4% to 3,288 units.

Inland Empire |market trends

In the Inland Empire inventory stands at roughly 20,724 single family and condo homes listed for sale in Riverside, California. The median asking price of these homes was approximately $255,000. Since this time last year, the inventory of homes for sale has decreased by 32.3% and the median price has increased by 10.9%.  

foreclosures

The number of California homes entering the formal foreclosure process during the first quarter declined to its lowest level in almost five years, the result of a more stable economy and housing market, as well as policies that increasingly favor short sales.

A total of 56,258 Notices of Default (NODs) were recorded at county recorders offices during the first quarter of this year. That was down 8.5 percent from 61,517 for the prior three months, and down 17.6 percent from 68,239 in first-quarter 2011.

Last quarter's tally of 56,258 NODs was the lowest since 53,943 NODs were recorded in second-quarter 2007. NOD filings peaked in first-quarter 2009 at 135,431.

luxury homes

While overall California home sales declined last year, the number that sold for $1 million or more in 2010 rose for the first time in five years as certain segments of the economy improved and high-end home shoppers went bargain hunting, a real estate information service reported.

Last year 22,529 Golden State homes sold for $1 million or more. That was up 21.0 percent from 18,621 in 2009 and the highest since 2008, when 24,436 homes sold for $1 million-plus. Million-dollar sales peaked in 2005 at 54,773, after which they declined each year through 2009.

The jump in $1 million-plus home sales in 2010 compares with a 9.0 percent year-over-year drop in total home sales, including all price levels. California's 418,578 total sales in 2010 were down from 460,166 in 2009. About one in 20 homes sold for a million dollars in 2010, while the year before it was one in 25, and in 2008 it was one in 16. 

cash sales

The share of Golden State homes purchased with cash rose to a record level last month as investors and others took advantage of lower prices and less competition during the market's winter doldrums, a real estate information services reported.

Last month 30.9 percent of all new and resale houses and condos sold statewide were bought without a mortgage - the highest level in at least 23 years. Last month's cash figure was up from 28.9 percent of sales in December and 28.5 percent a year earlier.

January's high point follows a record year for cash deals in California. Last year cash buyers purchased 27.8 percent of all homes sold, up from 26.0 percent in 2009, which was the prior annual peak.