Home Sales Heating Up, Distressed Inventory Down
Posted by Paul Eskildsen on Monday, February 23rd, 2009 at 5:04pm.Seven Consecutive Months of Year-Over-Year Increases
January 2009 marked the seventh month in a row that more homes were sold compared to the same month in the previous year, as reported by the Orange County Register. The 1,806 homes sold in Orange County in January marked a 40% over the same period in 2008,
Homes Under $500,000 are Hot
A closer look shows that lower priced homes continue to drive the market, fueled largely by first-time buyers and investors. Sales of houses and condos under $400,000 jumped almost 257%, and those priced between $400,000 and $500,000 were up 10.5%. All higher priced homes actually sold at a slower pace than in 2008, as shown by the table below.
| Price Range | Sales Jan'09 | % Change from Jan '08 |
| < $400,000 | 959 | 256.5% |
| $400,000 - $500,000 | 285 | 10.5% |
| $500,001 - $600,000 | 156 | -15.7% |
| $600,001 - $700,000 | 117 | -4.1% |
| > $700,000 | 206 | -33.5% |
Median Price Continues to Fall
The median price for homes sold in Orange County in January was $275,000, 28.3% down from a year earlier, and 43% below the June 2007 peak of $645,000. Since so many lower priced homes are selling, and so few in the higher price range, the median is somewhat skewed downward. This is partly represented in the year-over-year change in sales price per square foot, which fell 22.3%, five points less than the median.
Tighter Market for Bank Owned Homes
A side effect of the hot market for low-priced homes is that inventory is down. Steve Thomas of Altera Real Estate is reports in the Register that based on Expected Market Time "We’re now at the tightest supply of homes to buy, by this measure, since April 2006." Expected Market Time is the theoretical amount of time that it would take to sell all homes on the market at the current rate. There are now only 4.09 months of inventory on the market, compared with 4.31 a week ago and 8.46 a year ago. In addition, the supply of Bank Owned and Foreclosure homes is down 16% from November.
A tighter market means that it's possible a price bottom will form in the lower end of the market. Foreclosures will continue to enter the market, but a lower level of distressed properties would help build confidence that the worst is over and home prices at all levels will stabilize.
Print
ShareBe the first to comment on this blog entry!
Leave a Comment
