HIGHLIGHTS for December
- Home prices down, condo prices up.
- Home sales up second month in a row. Still down year-over-year.
- C.A.R.’s 2011 forecast.
Prices for single-family, re-sales homes in Santa Clara County fell for the second month in a row in December.
The median price was off 0.9% year-over-year, while the average price dropped 1.8%. This is after thirteen straight months of price appreciation.
For the year, the median price was up 14.1%.
Home sales…
rose for the second month in a row. The 900 homes sold represent an 11.2% increase from November. Year-over-year, home sales were down 4.4%. This is the seventh month in a row home sales have been lower than the year before.
Much of this can be attributed to the foreclosure mess. Although foreclosures are predominately clustered in the entry-level market, the sharp decline in prices has made many homeowners underwater. The effect of this is they can’t sell their homes and move-up. So, the move-up market is also suffering.
For the year, home sales were down 7.5%.
Sales momentum…
continued to fall last month and is now at –8%.
Our momentum stats are calculated using a 12-month moving average to eliminate seasonality. By comparing this year’s 12-month moving average to last year’s, we get a percentage showing market momentum.
Pending momentum…
a harbinger of future sales, while still positive, has also been trending downward. Last month the number was +21%.
In the condo market…
the median price was up from November, but off 5.9% compared to last December. The average price was also up from November, but down 7.8% year-over-year. For the year, the median price gained 7.8%.
Condos sales increased sharply from November, but were down 3.3% year-over-year. For the year, condo sales were off 1.9%.
Pending sales were down for the fifth month in a row: 11.1%.
Inventory, on the other hand, increased for the seventh month in a row: up 75.5% year-over-year.
More statistics…
Year-over-year, home inventory was up for the sixth month in a row: 27.1%.
The sales price to list price ratio continued slipping last month, down 0.3 of a point to 98.5%. This is the eighth month in a row the ratio has dropped. Since January 2000, the median ratio has been 99.8%, which is incredibly high. A falling ratio also indicates that momentum is faltering.
C.A.R.’s 2011 Forecast…
The California Association of REALTORS® expects the median home price to increase 2% in 2011. They forecast sales to increase by 2% also.
“California’s housing market will see small increases in both home sales and the median price in 2011 as the housing market and general economy struggle to find their sea legs,” said C.A.R. President Steve Goddard. “The minor improvement in the housing market next year will be driven by the slow pace of recovery in the economy and modest job growth. Distressed properties will figure prominently in the market next year, but we also expect to see discretionary sellers play a larger role,” he said.
“As the U.S. economy continues its tepid recovery, we’ll see some improvement in California’s economy,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “We expect a net jobs increase of approximately 1.4 million jobs in California for the year to come and an improvement in unemployment figures,” she said.
“The situation in the California housing market continues to be a tale of two housing markets,” said Goddard. The segment of the market under $500,000 has been driven by distressed sales, while higher-priced areas of the state have been constrained by restricted financing options, and increasingly have experienced an increase in the number of distressed properties. Sales in the low end have been constrained by a lack of inventory, putting upward pressure on prices. Multiple offers on lower-end homes have been very common, according to Goddard.
“A lean supply of available homes for sale will drive prices up at the low end, but larger inventories and limited, less attractive financing will cause continued softness at the high end,” said Appleton-Young. “There’s some indication that lenders will accelerate the number of foreclosures coming on market, further adding to the housing supply, but we do not anticipate that lenders will flood the market with distressed properties,” she said.
“The wild cards for 2011 include federal housing policies, actions of underwater homeowners, and the strength of the economic recovery,” said Appleton-Young. “What is certain is that favorable home prices and historically low interest rates will continue to make owning a home in California attractive for those who are in a position to buy,” she said.
