Recent waves of good news have been emerging on the national real estate scene. Mortgage rates are down, inventory is up and new jobs are being created – all signs of an improving market.
Now there is some fruit — as a new National Association of Realtors study for May has found that pending home sales have jumped the most since 2010 and more than expected, jumping 6.1% from April. Pasadena’s pending sales are up 6.3% from May to June.
Pending sales are a picture of the market 30 – 60 days in the future, so improvement in sales is likely to continue for at least a few more months. Continued increases in sales will depend on continued improvement in income and job creation.
Number of Sales
Year-to-date California sales for the first six months of the year are the lowest since 2008.
- California residential sales gained 0.6 percent in June 2014 but were down 12.6 percent from June 2013.
- Pasadena residential sales gained 3.1% for June but are down 10.7% from a year ago, mirroring the state numbers.
- Homes for sale in Pasadena increased by 6.5% from May to June, and the inventory increased to 2.5 months, continuing an upward trend dating from March.
“June marks the sixth consecutive month that [California] sales have been lower on a year-over-year basis,” said Madeline Schnapp, Director of Economic Research for PropertyRadar. “The lack of distressed property inventory [down 9.1%] and rapid increase in median prices [up 10% from a year ago] has definitely taken a toll on demand.”
The June 2014 median price of a California home reached its highest level since December 2007, up 1.3 percent, to $390,000 from $385,000 in May.
- On a year-ago basis, median home prices gained 10.0 percent.
- Our Pasadena median price is up 1.5% from last month and 14.5% from year ago.
- A median priced Pasadena home sold for $665,000 in June.
“The nearly uninterrupted double-digit monthly increases in median home prices from August 2012 through March 2014 has slowed considerably,” said Schnapp. “That’s good news for buyers who were finding themselves rapidly priced out of the market.”
In other California housing news:
- Cash sales accounted for 22.2 percent of total sales. Cash sales have been steadily declining since reaching an interim peak in May 2013.
- Flip sales fell 6.6 percent for the month and were down 30.0 percent for the year and are down 40.4 percent from the October 2012 peak.
- In June, nearly 1.1 million California homeowners, or 12.9 percent remain underwater.
- Investor purchases fell 8.7 percent for the month and are down 31.8 percent from June 2013. Investor demand continues to shrink in the face of higher prices and lower return on investments..
- Foreclosure starts, or Notices of Default (NODs), fell 2.0 percent between May and June, extending a longer-term downward trend. Foreclosure sales are down 12.6 percent for the year.
“Affordability and tight credit have slowed or stopped price increases despite lack of inventory,” said Schnapp. “Going forward, we expect low sales volumes and flat prices until increased supply or looser credit forces prices lower.”