California Home Prices Up 11%

From The Wall Street Journal.

The California housing market is showing more signs of stabilization—at least for now—as sales of bank-owned and bargain-basement homes in inland areas partially give way to sales of costlier homes toward the coast, according to a new report.

California's median home price rose 11.2% in February from February 2009, although home sales in the state slipped for the second consecutive month compared with a year earlier, according to a report released Thursday by MDA DataQuick, a La Jolla, Calif., housing-data provider.

The median home price increased to $249,000 in February from $224,000 a year earlier, DataQuick said. The median price rose 0.8% from January 2010. Home sales in the state fell 3.8% in February from a year earlier to 28,111 sales, but were up 0.9% from January 2010, DataQuick said.

The San Francisco Bay Area's median home price rose 20% from February 2009 to $354,000, while home sales fell from year-earlier levels for the second straight month. In Southern California, the median home price rose 10% to $275,000, led by a 13% rise in San Diego, while the number of home sales rose from year-earlier levels for the 20th consecutive month.

The increase in the statewide median price—the biggest year-over-year jump since March 2006—partially reflected a shift in the types of homes being sold in the state, as fewer foreclosures and stiff competition for bargains ate up inventory at the market's lower end, said DataQuick analyst Andrew LePage. "There has been a shift in what's selling and what's not selling," Mr. LePage said. "The high end has woken up, whereas it was comatose a year ago."

Comments

[Mark G.]

Note: since the mix is changing, the median price is not useful.

From DataQuick: Bay Area home sales down slightly from last year, median sale price rises

Bay Area home sales were subpar again in February, dipping below the year-ago level for the second straight month as some potential buyers worried about job security, some couldn’t get financing and others found a thin inventory of homes for sale. ...

Last month’s sales fell 22.2 percent short of the February average of 6,413 sales since 1988, when DataQuick’s statistics begin.

February’s sales were the second-lowest for that month since 1995, behind the record-low 3,989 homes sold in February 2008. January and February this year are the only two months since August 2008 in which sales have fallen year-over-year.

“The sales and price data remain choppy, with more ups and downs and inconsistencies than we’d typically see. It’s partly the season – January and February are often atypical and don’t serve as good barometers. But it’s more than that. The market remains fundamentally off kilter. There’s still relatively little lending going on in the upper price ranges, and little adjustable-rate financing, which had been vital to the Bay Area. Investor and cash-only deals remain well above normal, as does the level of sales involving distressed property,” said John Walsh, MDA DataQuick president.

“Despite the widening stability seen in the housing market in recent months, the outlook remains murky,” he said. “Whether prices will firm, or remain firm, will depend largely on three factors: The market’s response as the government reduces its housing stimulus, the economy’s ability to gain traction, and the decisions that lenders and borrowers will make in countless distress cases. The key question is how much more distressed inventory is coming, and when.”

Foreclosure resales – homes that had been foreclosed on in the prior 12 months – rose to 36.6 percent of all homes resold last month, marking the fourth consecutive month in which foreclosure resales edged higher. Foreclosure resales peaked at 52 percent of resales in February 2009, then gradually fell and, in the fall, leveled off near 32 percent before starting to rise modestly.

... Federally-insured, low-down-payment FHA loans, a popular choice among first-time buyers, made up 26.9 percent of Bay Area purchase loans last month. That was up from 23.3 percent a year ago and 1.4 percent two years ago.

Last month absentee buyers – mostly investors – purchased 19.4 percent of all Bay Area homes sold, the same as in January and up from 18.4 percent a year ago. The monthly absentee buyer average over the past decade is 13.0 percent. Buyers who appeared to have paid all cash – meaning there was no corresponding purchase loan found in the public record – accounted for a record 27.1 percent of sales in February, up from 25.7 percent in January and 24.4 percent a year ago.
This is definitely a market "off kilter". Almost 27% of the buyers used FHA insured loans, and another 27% paid cash (mostly investors). This is a long way from normal ...

http://www.calculatedriskblog.com/2010/03/dataquick-california-bay-area-sales.html