Hopefully Pasadena residents have inflated their tires and tuned their cars. If only we could put some air into the Pasadena housing market. As anticipated, the gap between unit sales closed this past month, closely mirroring unit sales in July 2007. If you recall from a previous post regarding Pasadena Upcoming Home Sales, I expected the market to reach equilibrium. The reason is that unit sales indicated a downturn last year, not because we experienced increased activity this year.

However steady or predictable unit sales can be, they have no bearing on sold prices. All you have to do is look at July 2008.

Pasadena Single Family Homes

In the overall market of Pasadena California real estate, single family homes are outperforming condos and townhomes. July unit sales were 65 units compared to 52 units last year, an increase of 25%. On the downside, the median price of $685,000 was 17% lower than last year’s median price of $826,750.

Contributing to the median price decline is the return of the low end market. Absent for the last couple of years, it is making a comeback. As an example in July 2007, a total of 4 single family homes were sold under $500,000. This past month the number increased to 20 units, or now 30% of the market below $500K. Of these 20 units, 14 properties appear to in some form of foreclosure that are either bank owned or short sale.

Current inventory levels indicate about an 8.5 month supply of unsold homes compared to 6 months supply last July.

Pasadena Condos and Townhomes

Unlike the single family market that showed an increase over last year in unit sales, the condo and townhome market declined. Last year 54 units sold, compared to only 38 units this year. The weakness is coming from properties available for sale exceeding the $500,000 price point. Analyzing the lower end of the market $500,000 and less, a total of 21 properties sold last year and 20 sold this past month. Low end sales remain fairly steady, but there is weakness above the $500K benchmark with only 18 unit sales this year compared to 33 last year.

Inventory levels show approximately 8.4 months supply compared to about 5 months last year.

Pasadena Real Estate Forecast

The median price of a single family in August ’07 was $792,000. Currently of the 550+ units available for sale, 51% are below the current median price of $685,000. As banks become more aggressive in liquidating their inventory, the low end of the market will continue to influence prices. Until we see more buyers enter the market, home sellers will find themselves more negotiable.