Burbank Real Estate Blog: August 2010

New home sales fell 12.4 percent in July to a record low 276,000 unit annual rate.

As with existing home sales , all areas of the country felt the decline.  Supplies are up to 9.1 months from June's 8.0 months.

New home prices are showing signs of weakness as the median price is down 6.0 percent to $204,000 for a - 4.8 percent year-on-year comparison. The median price is the lowest since 2003.

As I mentioned in yesterday's existing home sales report, the carnage was felt across the country and it will be some time before we see a more normalized real estate market.

The California Association of Realtors (C.A.R. ) reported Tuesday that the median home price of existing, single-family homes in California rose 10.4 percent in July compared with the year prior and home sales declined 20.8 percent.

What's interesting and somewhat surprising is that the year-over-year statewide median home price posted its ninth consecutive gain and seventh consecutive double-digit gain in July.  The median price of an existing, single-family detached home in California during July 2010 was $314,850, up 0.9 percent compared with June's $311,950 median price.

There are buyers out there, but they are cautious and are not willing to buy a property just for the sake of becoming homeowners.  As important as finding the right property is, many buyers today want value for their money and are looking very closely at the numbers-pending home sales, current active listings and recent closed escrows-in order to make informed decisions.

Lending has been somewhat tight lately, so if lenders decide to open the lending gates in the next few months that will have a strong impact on the current rising inventories.

California real estate facts:

• Calif. median home price: July 2010: $314,850 (Source: C.A.R.)

• Calif. highest median home price by C.A.R. region July 2010: Santa Barbara So. Coast $871,250 (Source: C.A.R.)

• Calif. lowest median home price by C.A.R. region July 2010: High Desert $128,950 (Source: C.A.R.)

• Calif. First-time Buyer Affordability Index - Second quarter 2010: 64 percent (Source: C.A.R.)

• Mortgage rates: Week ending 8/19/2010 30-yr. fixed: 4.42 Fees/points: 0.7% 15-yr. fixed: 3.90% Fees/points: 0.6% 1-yr. adjustable: 3.53% Fees/points: 0.7% (Source: Freddie Mac)

Existing home sales posted the largest decline nationwide, down 27.2% from June and 25.5% from same period last year.  This is the lowest level in 15 years and to further add salt to the wound housing supplies went from 8.9 months to 12.5 months, the worst reading in 11 years.

What is very interesting and points to some strength is that median prices  were only down .2%  from June and .7%($182,600) from last year.  The reality is that with increased inventories and more short sales and foreclosures on the way, there will be pricing pressure in the months to come.

The carnage was felt across the country and very telling are the figures that foreclosures represented 22% of sales, while short sales made up another 10%.  Distressed sales will continue to plague homeowners that are hoping to sell in the coming months.

Here in the Burbank area we are seeing similar findings as our inventories have risen to between 5-6 months and prices were down 1.5% month over month in July.   We have to go back to jobs and the local economy for a glimpse into the future, but make no mistake that foreclosures and short sale properties will be with us for a few years. 

We may not officially be in a double dip, but the numbers are pointing to a significant amount of slowing.  Whether this will go up from this point or give us months of lackluster sales is hard to say, but it is all part of the housing market recovery process, which overall is a good thing and will lead us to a more stable housing market.

More to come tomorrow as the fun continues with New Home Sales data being reported.

Call me at 818-795-8474 or email me at ana@anaconnell.com  if you would like to schedule a free comparative home analysis for the sale of your home discuss sales in your neighborhood.

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• Existing Home Sales Plunge 27.2% to Lowest Level Since 1999 (dailyfinance.com)
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The weekly economic news continues to point to weakness in jobs, the economy and the housing market.

The jobs market is less than optimal as many corporations continue to keep huge cash reserves and are not hiring, add to that the weakness in the economy, which of course is trickling down to the housing market and you have a current outlook that is dismal.  I would argue that when we do finally start to see the jobs recovery, then we'll see that effect trickle down to the economy, housing and hopefully lending that is not quite as tight as it is today.

Foreclosure activity increases 4 percent in July

Foreclosure filings - representing notices of default, scheduled auctions, and bank repossessions - increased 4 percent in July as compared with June, but the better news is that filings decreased almost 10 percent compared with the same period a year ago, according to RealtyTrac.

Properties receiving a notice of default increased 1 percent in July compared with June, but decreased 28 percent compared with July 2009.

Foreclosure auctions increased 2 percent in July compared with the prior month, while bank repossessions increased 9 percent during the same period, according to the report.

California accounted for 21 percent of the total number of properties receiving a foreclosure notice in July, a decrease of 3 percent from June and down 38 percent compared with July 2009.

Housing Market Index

The housing market index for August fell one point to 13 and is down nine points from a recovery peak of 22 in May.  This is the third month of decline and problems such as tight credit, inaccurate appraisals and competition from distressed properties continue to plague the market.

Existing home sales are due out tomorrow and new home sales are due out on Wednesday, both expected to come in lower.

On a local level we've seen the inventory here in the Burbank housing market continue it's upward spike as we're now at 5 months of inventory as compared with a 2-3 months supply early this year.

Burbank Real Estate Market-July 2010

• Homes listed for sale: 114
• Homes sold in September: 55
• Average home sale price: $502,049-down 1.5% from June 2010
  
• Average days on market: 63
• Pending sales:41
• Average selling price % of list price: 97.37%

Source: Southland Regional Association of Realtors