MORE YEAR-OVER-YEAR GAINS FOR SOUTHLAND HOME SALES AND PRICES

Southern California has continued its gradual recovery in housing, stymied only by sluggish jobs and lack of inventory.  This newsletter's last edition of 2012 made mention of the less than 3 months inventory in most cities.  A neutral market is considered 6 months of inventory, that is a market that favors neither seller nor buyer.  So it could be said that as we start out 2013 we have a seller's market.   That being said, other aspects of the economy, such as sluggish job growth, coupled with amazingly low interest rates, still favor the strong buyer.  Perhaps it is a more even market after all, and that is not such a bad thing.  A total of 19,285 new and resale houses and condos sold in the Southland counties from Ventura down to San Diego.  That is the highest monthly total since November 2006.  That number is up 14% from November of 2011.  Activity rose the sharpest in the mid to upper range of houses, a range typical of "move up" buyers, and would account for the pent up demand of that market segment.  In fact, sales in that range, $300,000 to $800,000 jumped 34% year over year.  Short sales, where properties sell for less than what is owed against them, still accounted for 26% of the market share in November.  (The last complete monthly stats available.)  When looking at the increase in sales volume year over year, of the Southland counties,  Orange County leads the way at 25% followed by San Diego with 23%.  San Bernardino actually declined by 3% performing the worst of all counties.  More properties should hit the market as the new year gets underway, typical for the first quarter as many sellers sit out the holidays.  This should bode well for both seller and buyer, by allowing more choices for the buyer, a little more competition for the seller, to keep pricing increases in check.  Expect to see a healthier housing market this year, with growth that can be sustained by economic reality rather than the financing fancies of years gone by.

CHAPMAN REPORT PREDICTS SLOW JOB, HOUSING GROWTH

In a nutshell, 26,000 new jobs, 6.8% increase in home values, and 10% rebound in construction spending.  Is this accurate?  Are you a half empty or half full type of person.  Tax hikes and uncertainty of the national debt and ceiling are certainly reasonable concerns.  Construction seems likely to make a bigger comeback than that forecast.  However, jobs does remain a concern.  Rumor on the street is that there are companies out there with cash on the sidelines, and jobs in the pipeline.  This column will weigh in with a "half full" vote, that housing will be stronger than last year and the distressed property continuing to be absorbed and outpaced by equity sellers.

WHAT WERE THE ACTUAL NUMBERS?

The total number of units sold for November in Orange County was 2,879.  This number includes 1,841 resale houses, 829 condos, and 209 new homes.  The median price for all homes was $450,000 and that is a change of 12.5% from a year ago.  The median resale price was %525,000, and condos came in at $307,500 and new homes topped out at $606,250.  Foreclosed homes across the nation plunged 23% and although California wasn't in the group of the 5 states with the lowest number of foreclosures, it also is no longer in the group of the top 5 states.  Good news for California.

GET READY FOR THE MORTGAGE MARKET OF 2013

Bankrate.com had some awesome tips to consider for getting the best deal on mortgage rates this year whether you're buying or refinancing.  Here's the top 5:  1) Stop procrastinating and refinance!  If you're paying more than 3.75 to 4 percent, it's time.  These rates won't be here forever.  2) Ensure that your credit is golden.  Credit standards remain tight, but there are things you can do to take care of old dings on your credit.  Pay off a low balance credit card and watch your credit score go up 30 points.  3) Underwater refinancers...don't take no for an answer.  HARP, the :home affordable Refinance Program, is here to help you.  Go online to find information.  4) Compare FHA versus conventional loans.  FHA requires a much smaller down payment.  5) Approved for a mortgage?  If yes, then don't buy anything!!  Don't apply for credit anywhere else during your loan process.  Once you're approved, lenders don't want to know you're out borrowing and getting into more debt.

HOUSING: YEAR END REPORTS REVEAL MARKET COMING BACK

Every year-end housing report revealed that the real estate market is recovering quite nicely. Here is a quick synopsis of each:

Existing Home Sales Report

• Total existing-home sales rose 5.9 percent in November over last month
• Sales are 14.5 percent higherthan November 2011
• Sales are at the highest level since November 2009
• The national median existing-home price was $180,600 in November, up 10.1 percent from November 2011
• Total housing inventory at the end of November fell to a 4.8-month supply; it was 5.3 months in October, and is the lowest housing supply since September of 2005 when it was 4.6 months

Pending Sales Report

• Pending home sales increased in November for the third straight month and reached the highest level in two-and-a-half years
• The index is at the highest level since April 2010 when buyers were rushing to beat the deadline for the home buyer tax credit
• With the exception of several months affected by tax stimulus, the last time there was a higher reading was in February 2007
• On a year-over-year basis, pending home sales have risen for 19 consecutive months

New Home Sales Report

• Sales of new homes rose 4.4% in November to a two-and-a-half-year high
• This is the highest level since April 2010, when a temporary tax credit boosted demand.
• Sales are now 15.3% higher compared to one year ago

Case Shiller Home Price Index

• Home prices rose 4.3% in the 12 months ending in October
• In nineteen of the 20 cities covered, annual returns in October were higher than September

MEDIAN PRICE -- UP...INVENTORY -- WAY DOWN... SALES VOLUME -- UP

What a month it has been!  It's been chaos if you're a buyer trying to find a property, and a little déjà vu if you are a seller that is getting multiple offers on your property that's for sale.  That being said, however, we are not seeing the double digit appreciation that was present in 2005 and 2006.  That is a good thing, as that was the start of the bubble that burst and caused the subsequent crash and the very slow recovery we are now enjoying.  September numbers brought some interesting news for Southern Californians.  (More specific numbers to follow.)  The median price was up 5.9% versus September a year ago.  There were 23,977 sales and that was up 16.2% from the previous year.  October numbers that are found in the next section, were even better.  But a really interesting fact from the last month of the third quarter was that local zip codes showed improvement in 53 of 83 for the county.  That shows that there isn't a concentration of business or growth in just hard hit areas such as Santa Ana, or south Orange County, where investors are flipping properties.  In fact, sales for October, the last complete month available, show that move up buyers, that elusive quadrant, has finally reemerged and these buyers are entering the market.  Obviously we need more to do so, because of inventory limitations, but it has started.  The upper end of properties over 2 million is moving more robustly than it has since 2006.  Finally, a last bit of good news is that home construction is finally on the rise, seemingly for good, not just a sputter of one or two developments, but begun in earnest by multiple builders.  In fact, 1,700 construction jobs were added as compared to September 2011, according to the Employment Development Department. This is good news, because without that vital addition of new homes, we would really see an inventory bog down in the next 2 years.  

WHAT WERE THE ACTUAL NUMBERS?

According to DataQuick, southern California home sales rose sharply in October as the previously discussed move-up buyers joined investors, shifting the mix of homes selling from the first time buyer, or investor looking for rental scenario.  Foreclosures hit a 5 year low, as short sales continued to move front and center as the primary distressed listing.  Make a note, however, that standard, or equity sales, are making a comeback as non-distressed owners may enter the market in an effort to sell and move up, or exit Orange County to become a retiree and move elsewhere.  The October total was 21,075 homes sold in Los Angeles, Orange, San Bernardino, Riverside, San Diego, and Ventura counties.  That was up a whopping 18% from the 17,859 sold in September.  The median price for the Southland was $315,000 in September and October, and that was up 16.7% from the $270,000 of September 2011.  Short sales made up an estimated 26% of the resale market in the Southland for October.  The total number of sales for Orange County was 3,148, which was up 40% from the same period a year ago.  The total number of resale houses was 2,066 and condominiums had 882 sales. New homes came in at 200.   The median price for all homes was $455,000 and for single-family it was $511,000.  The median price for condos was an even 300. Interestingly, buyers paying with all cash hit a near record 32.1% for southern California.  A final number which is somewhat sobering... 57% of all homes for sale, had multiple offers.