By Jodi Summers
Optimistic news on the housing market from two very respected sources – the Wall Street Journal and Forbes. Yeah us! According to Forbes, three of the top ten markets where home prices are rising are in California.
Enjoy this fact for residential real estate in Santa Monica – comparing February 2008 to February 2010, the number of under contract properties is up 120%, according to Clarus Market Metrics.
Asking prices on single-family homes have increased as much as 36% from the previous year in some local cities, Forbes notes, an indicator that is “a bounce off the bottom of the bubble bursting.”
In Santa Monica, contrasting Feb. 2008, to Feb. 2010, the median price of for sale properties is down 15% and the median price of sold properties is down 10%.
Three of the top ten markets where home prices are rising are in California. They say it’s because markets in that state were inflated earlier, many were well positioned to make a comeback even before the larger economy recovered. According to the 2010 National Apartment Index Report by Marcus & Millichap, our sister city, San Diego, came in @ No. 2 (behind Washington D.C.) as a residential market to watch due to expectations for resumed employment and household growth. (Los Angeles is @ No. 13, thanks to perceived strengths in our marketplace. )
Forbes notes rising prices in the SoCal cities of Poway and Arcadia, as well as Sunnyvale up in Silicon Valley. You will be delighted to note that in Arcadia, prices increased an average of 28%. Inventory is up, and prices “overall” are on the rise, following “a natural seasonal trend for healthy markets, but it hadn’t been reflected in California since the bust.”
“That natural seasonal stuff didn’t happen in 2008 in the California markets,” observes Michael Simonsen, CEO of Altos Research. “2007 to 2008 was the big bust, so the expected seasonal uptick didn’t happen. It did in 2009.”
In Feb. 2008, we had 10.6 months of property inventory on the market. In Feb. 2010, the average months supply of inventory is down -53.1% to about 5 months. Sages say 3.7 is parity in the marketplace..
Another infobyte to bolster your confidence in the local residential real estate market – the Wall Street Journal proclaims that shadow inventory is unlikely to hurt the marketplace. Nearly 5 million houses and condos, of which the mortgages are delinquent, will go through foreclosure over the next few years, concludes research by John Burns Real Estate Consulting Inc. The study also presumes that there is strong investor demand for these properties, “as long as employment continues to recover and interest rates remain moderate, these sales won’t have much impact on overall prices.”
We would like your real estate business. If we can provide you with more detailed information, please contact the SoCal Investment Group through Jodi Summers, Jodi@jodisummers.com. We look forward to working with you in your next real estate transaction.
The Wall Street Journal, James R. Hagerty (02/16/2010)