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News and Happenings in the Area
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| Harvard University's State of the Nations Housing 2008 - 6/25/2008 5:55:00 PM | For Harvard University's State of the Nations Housing 2008:
http://www.jchs.harvard.edu/publications/markets/son2008/son2008.pdf
| | C.A.R. reports sales increased 18.1 percent; median home price fell 35.3 percent in May - 6/25/2008 5:50:00 PM | LOS ANGELES (June 25) – Home sales increased 18.1 percent in May in California compared with the same period a year ago, while the median price of an existing home fell 35.3 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.
“Home sales exceeded 400,000 last month for the first time since early 2007. While this is a welcome sign for the market, it was due in part to the large share of distressed homes for sale in many parts of the state,” said C.A.R. President William E. Brown. “Sales also rose above their year ago levels for the second month in a row after 30 consecutive months of year-to-year decreases. The lower prices associated with distressed sales along with favorable interest rates both contributed to higher sales levels.”
Closed escrow sales of existing, single-family detached homes in California totaled 423,700 in May at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. Statewide home resale activity increased 18.1 percent from the revised 358,640 sales pace recorded in May 2007.
The statewide sales figure represents what the total number of homes sold during 2008 would be if sales maintained the May pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
The median price of an existing, single-family detached home in California during May 2008 was $384,840, a 35.3 percent decrease from the revised $594,530 median for May 2007, C.A.R. reported. The May 2008 median price fell 4.7 percent compared with April’s $403,870 median price.
“The statewide median price declined 35.3 percent to $384,840 in May, a record for year-to-year percentage decreases in the median, reflecting the effect of large numbers of short sales and foreclosures in the market,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “With the statewide median in the $585,000- to $595,000-range through August of last year, we expect the market to continue to experience large year-to-year adjustments through the summer, even if the median price holds steady over the next few months.”
Highlights of C.A.R.’s resale housing figures for May 2008:
C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in May 2008 was 8.4 months, compared with 10.7 months (revised) for the same period a year ago. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.
Thirty-year fixed-mortgage interest rates averaged 6.04 percent during May 2008, compared with 6.26 percent in May 2007, according to Freddie Mac. Adjustable-mortgage interest rates averaged 5.24 percent in May 2008, compared with 5.52 percent in May 2007.
The median number of days it took to sell a single-family home was 49.7 days in May 2008, compared with 50.8 for the same period a year ago.
In a separate report covering more localized statistics generated by C.A.R. and DataQuick Information Systems, 4.1 percent, or 15 out of 369 cities and communities, showed an increase in their respective median home prices from a year ago. DataQuick statistics are based on county records data rather than MLS information. DataQuick Information Systems is a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. (The top 10 lists are generated for incorporated cities with a minimum of 30 recorded sales in the month.)
Statewide, the 10 cities with the highest median home prices in California during May 2008 were: Los Altos, $1,710,000; Burlingame, $1,700,500; Saratoga, $1,506,500; Mill Valley, $1,475,000; Los Gatos, $1,350,000; Newport Beach, $1,250,000; Cupertino, $1,172,500; Santa Barbara, $1,066,000; Rancho Palos Verdes, $950,000; San Carlos, $900,000.
Statewide, the 10 cities with the greatest median home price increases in May 2008 compared with the same period a year ago were: Sonoma, 61 percent; Cupertino, 16.7 percent; Mill Valley, 14.6 percent; Los Gatos, 10.2 percent; Sunnyvale, 4.7 percent; Fullerton, 3 percent; Burlingame, 2.1 percent; Santa Barbara, 2 percent; Los Altos, 1.8 percent; Folsom, 0.5 percent.
| | Home Sales May Rise Modestly Before Broader Upturn in Second Half Of 2008 - 6/11/2008 3:37:00 PM | WASHINGTON, June 09, 2008
A modest gain in the level of home sales is possible over the next couple months, and an improvement is forecast for the second half of this year as more buyers are able to access affordable mortgages, according to the latest forecast by the National Association of Realtors®.
The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in April, rose 6.3 percent to 88.2 from a reading of 83.0 in March. It’s the highest index since last October, but remains 13.1 percent lower than April 2007 when it stood at 101.5.
Lawrence Yun, NAR chief economist, said pending sales contracts have picked up notably in areas undergoing significant price drops. “Bargain hunters have entered the market en masse, especially in areas that have experienced double-digit price declines, but it’s unclear if they are investors or owner-occupants,” he said. “Sharp price reductions are leading to a quicker discovery of price equilibrium points. The West is already seeing year-over-year gains in pending contracts.”
The PHSI in the West rose 8.3 percent to 98.8 in April and is 4.0 percent higher than April 2007. In the Midwest, the index jumped 13.0 percent to 83.7 in April but remains 13.1 percent below a year ago. The index in the South increased 4.6 percent to 88.8 but is 22.5 percent below April 2007. In the Northeast, the index declined 1.9 percent in April to 79.3 and is 12.2 percent below a year ago.
NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said the market may be breaking its holding pattern. “It appears that more buyers are realizing they can take advantage of a favorable combination of mortgage interest rates, home prices and family income,” he said. “Overall affordability conditions are the best we’ve seen since the middle of the housing boom in 2004, but with far more choices and much less pressure than buyers experienced four years ago to make an investment in their future. Recent declines in mortgage rates on conforming jumbo loans and a return to sound but not overly stringent underwriting standards will permit more people to qualify for a loan.”
NAR’s housing affordability index has been trending up this year and is projected to rise 15 percentage points to 128.0 for all of 2008.
“Although mortgage interest rates will remain historically favorable, they will start to steadily inch up,” Yun said. The 30-year fixed-rate mortgage should rise gradually to 6.3 percent by the end of this year, and then hold at that level for most of 2009.
Yun said the underlying fundamentals point to a pent-up demand. “Home sales are at about the same level as they were 10 years ago, yet the population has grown by 25 million people and we have over 10 million more jobs,” he said. “The housing market has been underperforming by historical standards, partly because buyers were hampered by mortgage availability issues, but that’s improved and an upturn is more likely. On the other hand, it’s unclear what role consumer confidence will play in the coming months.”
Existing-home sales should increase from an annual pace of 5.05 million in the second quarter to 5.83 million in the fourth quarter. For all of this year, existing-home sales are expected to total 5.40 million, and then rise 6.3 percent to 5.74 million in 2009. “Sales gains will be greatest in areas that underwent sharp price declines,” Yun said.
After unprecedented home price declines in the first half of the year, many markets can anticipate stabilizing price trends in the second half. The aggregate median existing-home price is likely to decline 8.4 percent in the first half of this year, and then begin to stabilize in the second half before rising 4.4 percent next year to $213,900. “Policymakers need to be attentive to the fact that many homeowners have seen a reduction in housing equity, or are in an ‘underwater’ situation. More needs to be done on the policy front to alleviate hardships and bring fence-sitters back into the marketplace,” Yun said.
A great mix of conditions continues around the country. “We’re seeing healthy price gains in moderately priced areas like Erie, Pa., and Corpus Christi, Texas, and double-digit gains in others,” Yun said. “Our most recent data shows sales rising strongly from a year ago in some areas that experienced sharp price drops, including Detroit and Las Vegas.”
New-home sales will probably fall 31.7 percent to 529,000 in 2008 before rising 12.5 percent to 595,000 next year. Housing starts, including multifamily units, are projected to drop 27.2 percent to 987,000 this year, and then slip 0.6 percent to 980,000 in 2009.
“Rising construction costs will provide less room for price cuts on new homes,” Yun said. The median new-home price is forecast to decline 3.1 percent to $239,500 in 2008, and then rise 5.4 percent next year to $252,400.
| | C.A.R. reports sales increased 2.5 percent, median home price fell 32 percent in April - 5/28/2008 6:11:00 PM | LOS ANGELES (May 23) – Home sales increased 2.5 percent in April in California compared with the same period a year ago, while the median price of an existing home fell 32 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.
“Home sales registered a 2.5 percent year-to-year gain compared with April 2007, ending a 30-month string of year-to-year percentage decreases that began in October 2005,” said C.A.R. President William E. Brown. “This is not to say that the credit crunch that has contributed to the sales decline has disappeared. Both tighter underwriting standards and the ongoing effects of the credit/liquidity crunch continue to constrain sales.”
The median price of an existing, single-family detached home in California during April 2008 was $403,870, a 32 percent decrease from the revised $594,110 median for April 2007, C.A.R. reported. The April 2008 median price fell 2.6 percent compared with March’s revised $414,640 median price.
“Significant price declines are spurring home sales to bargain hunters and first-time buyers at the middle- and low-end of the market, especially in areas with a concentration of distressed properties,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young.
“A year ago, homes for sale under $500,000 accounted for 40 percent of sales, the middle segment ($500,000 to $1 million) made up 45 percent, and the over $1 million segment captured 15 percent of the market. As of April 2008, that has shifted to 64 percent, 26 percent, and 10 percent, respectively, as the crunch severely constrained funding to the market over $500,000, with a correspondingly dramatic decline in sales.”
Highlights of C.A.R.’s resale housing figures for April 2008:
C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in April 2008 was 9.2 months, compared with 11.3 months for the same period a year ago. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.
Thirty-year fixed-mortgage interest rates averaged 5.92 percent during April 2008, compared with 6.18 percent in April 2007, according to Freddie Mac. Adjustable-mortgage interest rates averaged 5.19 percent in April 2008, compared with 5.45 percent in April 2007.
The median number of days it took to sell a single-family home was 52.1 days in April 2008, compared with 53.1 for the same period a year ago.
Statewide, the 10 cities with the highest median home prices in California during April 2008 were: Saratoga, $1,480,000; Manhattan Beach, $1,372,500; Los Gatos, $1,335,000; Santa Barbara, $1,067,500; Cupertino, $918,500; San Carlos, $885,500; Danville, $829,000; Redwood City, $817,500; San Clemente, $809,500; Santa Monica, $780,000.
| | C.A.R. reports entry-level housing affordability rises 18 percentage points in first quarter - 5/22/2008 10:37:00 AM | LOS ANGELES (May 20)—The percentage of households
that could afford to buy
an entry-level home in California stood at 44
percent in the first quarter of 2008,
compared with 26 percent for the same
period a year ago, according to a report
released today by the CALIFORNIA
ASSOCIATION OF REALTORS® (C.A.R.).
C.A.R.’s First-time Buyer Housing Affordability
Index (FTB-HAI) measures the
percentage of households that can afford to
purchase an entry-level home in
California. C.A.R. also reports first-time
buyer indexes for regions and select
counties within the state. The Index is
the most fundamental measure of housing
well-being for first-time buyers in
the state.
The minimum household income needed to purchase an
entry-level home at
$356,350 in California in the first quarter of 2008 was
$67,830, based on an a
djustable interest rate of 5.65 percent and assuming a
10 percent down payment.
First-time buyers typically purchase a home equal to
85 percent of the prevailing
median price. The monthly payment including
taxes and insurance was $2,260
for the first quarter of
2008.
At $67,830, the minimum qualifying income was 30
percent lower than a year
earlier when households needed $96,500 to qualify
for a loan on an entry-level
home. Recent decreases in home prices and
mortgage rates have brought
affordability into better alignment with income
levels of the typical California
household, where the median household income
was $50,700.
The First-time Buyer Housing Affordability Index
rose 11 percentage points in the
first quarter of this year compared to the
fourth quarter of 2007 due to a .56 point
decrease in the mortgage rate and a
14.3 percent decrease in the entry-level
median home
price.
At 64 percent, Sacramento County and the High Desert
region were the most
affordable areas in the state. Monterey was the least
affordable area in the state
at 29 percent, followed by the San Francisco Bay
Area at 30 percent.
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