Is Pasadena slowing like the rest of California? There are signs that it is, though it’s hard for us to say since every listing we’ve had in the last three months has sold over the asking price with several offers on each.
Madeline Schnapp of Property Radar says that “The bloom is definitely off the California real estate rose.” “The rapid rise in prices over the last two years has outstripped the ability of many would be California homeowners to purchase.”
Here’s more on the California scene:
• Distressed properties are way down, so that has slowed sales.
• Median prices year-over-year increased 8.3%, which is the slowest monthly gain since June, 2012. Further the gain is due mostly to a shift from less- to more expensive homes,, and not a change in underlying home values.
• Negative equity (under-water home owners) is declining but still at historically high levels. In August, a million California homeowners were underwater. That’s 11.6% of owners.
• Cash sales were 22% of total sales. That’s down from a high of 40% in August, 2011. “Flip sales”, investor purchases and foreclosures continue to decline.
Here’s what happened in Pasadena in August
We reported last month that Pasadena is outperforming the housing market in most areas, and reached peaks in most areas. In August, every category moved down.
Pasadena’s pending sales (properties under contract but not yet closed) dropped from 168 in July to 159 in August, which is a drop of 5.4%. The pending index rose in every month this year except last February, so this represents a “lets watch September” caution flag. Pending sales are a picture of the market 30 – 60 days in the future.
Number of Sales
Pasadena residential sales gained another 4.3% after an amazing rise of 23% from June to July. There were 172 sales in August, up from 165 in July, and up from 167 a year ago. The number of sales increased in spite of a drop in inventory of homes available for sale… from 2.0 months in July to 1.8 months in August.
The for-sale inventory continues to drop, now at the lowest level since August of 2013. Most of us think that a balanced inventory, where neither buyer nor seller have a negotiating advantage, begins at around six month supply. We have seen inventory as high as 18 – 24 months where it looked like a real estate sign was on every other house! There were 306 Pasadena properties for sale at the end of August, and there were 300 at the same time last year, and 327 in July.
Pasadena’s average sold price per square foot is $487, and that is down nearly 2% from last month, and up 5.4% over the last year.
Our Pasadena median price dropped 2% from last month, and in July, but is 7.3% higher than a year ago. The median number over the last year has ranged from a low of $540,000 in January 2014, to a high of $667,000 in May, 2014. August was $635,000, the lowest since March.
More in a month, and we will report on the national news in a week of so, though their numbers are from July.