by Jodi Summers
“I am fully aware of the challenges that we face in restoring economic and financial conditions,” observed Federal Reserve chairman Ben Bernanke in a recent speech. “With respect to longer-run prospects, however, my own view is more optimistic.”
Sellers, follow the words of the chairman of government funds, hold the course and look forward. Buyers, you’re still very lucky, conditions are not going to get much better than this! In Santa Monica, comparing Aug-10 vs. Aug-11, Clarus Market Metrics reports that the number of sold single family properties has not changed, staying @ 50. BUT! The median sold price has dropped 23% from Aug-10 vs. Aug-11 from $966,000 to $743,500. And this is with shrinking supply. The number of for sale properties is down 32% and the number of sold properties has not changed. Less is out there because those that don’t have to sell are looking to the future.
Outside of our paradise by the sea, the numbers are less drastic. Statewide, sales of existing single-family homes increased by +4.5% compared with July 2010 to 458,440 units (seasonally adjusted, annualized rate), detailed the California Association of Realtors (CAR) is their July 2011 report for existing home sales and prices in California. Meanwhile, the median price declined by -7.6% to $294,230.
“Unfortunately, the recession, besides being extraordinarily severe as well as global in scope, was also unusual in being associated with both a very deep slump in the housing market and a historic financial crisis,” chairman Bernanke explained. “These two features of the downturn, individually and in combination, have acted to slow the natural recovery process.”
The drop in sale prices is particularly interesting when you look at information supplied by Altos Research. They report that the current median list price in Santa Monica is $1,797,000. So, we’ve got a million dollar discrepancy between selling price and sold price…and obviously different sets of criteria set up by each company.
California Association of Realtors (CAR) offers Sales and price activity by county:
* Los Angeles County: unit sales dropped by -4.7% over the year to July, while the median price fell by -4.3% to $317,060.
* Orange County: sales declined by -6.1% and the median price moved down by -3.1% to $551,510.
* Riverside County: sales of existing homes ticked up by +0.4% but the median price declined by -5.5% to $200,910.
* San Bernardino County: sales were up by +1.5%, while the median price fell by -6.6% to $135,150.
* San Diego County: unit sales rose by +4.4%, but the median price was down by -3.6% to $375,330.
* Ventura County: existing home sales jumped by +7.7%, while the median price declined by -5.0% to $421,870.
Nationally, Existing-Home Sales Down in July but Up Strongly From a Year Ago. Total existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, fell 3.5%
In Santa Monica comparing Aug-10 vs. Aug-11, the median price of for sale properties is up 7% and the median price of sold properties is down 23%.
“Affordability conditions this year have been the most favorable on record dating back to 1970, but many buyers are being held back because banks are offering financing to only the most highly qualified borrowers, ignoring a large share of otherwise creditworthy buyers,” chairman Bernanke concluded. “Those potential buyers represent the difference between an uneven recovery and a much more robust housing market that could stimulate additional economic activity and create jobs.”
Thirty-year fixed mortgage interest rates averaged 4.55% in July, which was not much changed from the average rate of 4.56% a year ago.
We’re here to help you with your real estate needs. Please contact Jodi Summers and the SoCal Investment Real Estate Group @ Sotheby’s International Realty – or 310.392.1211, and let us move forward together.