When Pasadena home sales and prices began to fall, there was no specific time or day to mark the memorable event. No likely questions such as “Where were you the day the real estate markets began to fall”? It began like a slow leak on a faucet until it developed into a running stream of water. Some people were unaffected, others devastated. It has now been 5 years after real estate prices reached their peak and began a slide that would result in many people losing a tremendous amount of equity or worse, their homes.
Pasadena Home Sales – Median Prices and Price per Square Foot
Fast forward to 5 years later. Most reports indicate the housing market is turning around, consumer confidence is on the upswing and better days are ahead. Where are we now compared to the last five years? (click on any chart to expand it)
The blue line represents the median home price in Pasadena by month. The numbers on the left represent ($000′s). Beginning in January 2008 the median price was approximately $650,000, before reaching $775,000 in May 2008. Now contrast that with the price per square foot represented by the green bars. January ’08 saw a price per square foot of almost $525, but dropped to almost $475 in May’08, while both declined steadily through the end of the year.
2008 began a roller coaster ride to the bottom as median home prices and prices per square foot seesawed back and forth in 2009 and 2010.
Pasadena Home Sales – Units Sold and Inventory Levels
A couple of good indicators to the rise or decline in housing vales is the number of homes being sold and how may homes are for sale.
This chart has a couple of different axis points to indicate what is being tracked. The deep blue or purple line represents the number of homes (units) for sale over the 5 year period with the scale on the left. In January of 2008, about 525 Homes were on the market, compared to October 2012 and approximately 125 units.
The number of homes in escrow as well as the number of homes “sold” are referenced on the right. In June of ’12 we had the highest number of homes in the last 5 years being sold and entering the escrow process. Also in 2012 we have more months where unit activity has been around +90 units or more.
Pasadena Home Sales – Annual Units
This year will definitely be Pasadena’s best housing year in the last 5 years. Just as national reports indicate a turnaround in the housing market, the local numbers are indicative as well. I have taken the liberty to forecast the remaining couple of weeks of December and It appears Pasadena will report an increase of 12.5% in actual unit sales over 2011, and clearly 2012 will be on the books as the best year for Pasadena housing since the market declined.
Pasadena Home Sales – Market Summary
Any presentation of day should beg the next question….”So what” ?
Two comparisons here we should take not of. As you can see, Pasadena home sales are still a ways off from year 2008 in terms of median sale prices & prices per square foot. However 2008 was a market in decline. Just as prices rise slowly, they fall slowly as well. Didn’t someone say something about “for every action there is an equal and opposite reaction”? The one big change over the last 5 years is that 2008 was a Buyers market, and 2012 has definitely been more of a Sellers market.
The housing market stabilized in 2011 as evidenced by the declining number of homes for sale with inventories being much more consistent throughout 2102.
The big factor was 2012 produced more months where home prices consistently maintained an average of $400 per square foot, something we did not see in years 2009 – 2011.
As comparison analysis are based on year over year, 2012 was a very positive year for the housing market in Pasadena.
As with cycles, I believe the next few years will be positive as well. It took several periods for housing to finally hit bottom, stabilize and then turn positive. If you are waiting for a return to the glory days to sell your home, I think you may still be in for a wait as price appreciation will much more likely be steady but at a much slower pace.
Share your thoughts and opinions with us. What are your thoughts?