Last month our opening sentence regarding the Pasadena real estate market was: “Wow! The real estate market looks great in our community based on the numbers from March and our experience in our day-to-day activities.”
Since then we’ve heard from the National Association of Realtors and Janet Yellen of the Federal Reserve Board, both expressing concern that the national market is flat. They expected more new building permits and sales after the difficult winter, and so far that hasn’t materialized. The most important factor affecting housing market activity is probably the flow of credit – the willingness of lenders to make mortgage loans. The Fed said that lending standards tightened in the first quarter, while mortgage demand dropped. So, our economy is improving and is boosting employment and consumer confidence, but increasing home prices, credit standards, and interest rates may offset that good news.
So much for the national outlook. Here’s how April looked in Pasadena:
We repeat our advice from a month ago — If you price your home correctly, expect multiple offers over the asking price. We see this time and again in all price ranges. The average sold price of a Pasadena property was 102% of its list price.
The number of homes for sale in Pasadena increased again in April. There were 15% more homes for sale in April than March and a whopping 40% more than last April. The inventory of homes for sale increased to 2.3 months from March’s two months of supply. That is because of the increased number for sale, and that the pace of homes sold was flat. The inventory number says that if nothing came to market, all existing homes for sale will be gone in 2.3 months at the current rate of sales.
The number of sales was flat from March to April, mirroring the national trend. Remember last spring? It was crazy, and the number of sales last April confirms our memory. The number of sales was 20% higher.
The number of homes that went into escrow (pending sales) in April was 10.5% down from March, and down 26.4% from a year ago. We will watch this carefully, as this number is a leading indicator of the months to come.
We like to look at the average price per square foot of sold properties. Prices measured in this way were down a tiny bit – a bit over one percent – so this indicator has been flat for the past three months. The average price per square foot of a sold property in Pasadena stands at $472 per square foot, and that is up almost 6% from a year ago. Most forecasts spoke of a 5 – 10% increase in our prices for the year, and so far we are on track to achieve that number.
Further studies show that the median price of a Pasadena sold property rose again in April, for the fourth consecutive month. The median price of a Pasadena home sold in April was $643,000, up from $600,000 in March and from $598,000 a year ago. The median price is the price where half sold lower and half sold higher. That is attributed to increased demand, pushing prices up, and higher priced homes coming to market — a good sign that may increase the number of homes for sale.
The average number of days on the market from listing to sale close dropped a lot – it had taken 60 to 70 days over the last six months, but was 45 days in April, the lowest number since last May. We expect that pace to continue till Thanksgiving.
April overview: Caution on the national scene, and reflected in the Pasadena numbers in the number of Homes Sold and Open Escrows. Most other indicators remain positive for a strong spring season.
We will continue to monitor lending standards – more relaxed loan criteria are announced every week, and we would like to see those loans make an impact on the ability of home buyers to act. The impact from investors has diminished, making first time home buyers more able to find and buy a home. These buyers are one key to increased inventory for those who want to move up.