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Pasadena California Real Estate Market Update for March ’08

April 14, 2008 By 1 Comment
Pasadena Single Family Home Sales March

If you have a property for sale and have been hopeful the market would begin to turnaround and show some signs of life, the March sales results will likely disappoint you. We have yet to see any sign that home buyers are returning to the market, choosing instead to wait and see if prices fall further.

Also in an earlier post this Pasadena Realtor emphasized that we would soon be able to chart the course of the Pasadena Real Estate market by focusing in on one key factor….inventory. That number, indicating the quantity of Pasadena Homes for sale has been rising for the last few days, just as I predicted it would based upon this time of year. However we are not seeing any evidence of a corresponding rise in home sales.

Single Family Unit Sales Decline 50%, Median Price Falls 12%

March becomes the third successive month in which unit sales have declined at least 50%, dashing any hopes that in 2008 we would begin to see a reversal of falling sales and prices. We are also beginning to see a greater disparity between median sales prices than we noticed previously.

And to add insult to injury, it is taking about 1 1/2 times as long to sell those 50% fewer units with the days on market increasing form 83 to 125 days.
Pasadena Single Family Home Sales March

Pasadena Condominiums & Townhomes Mirror Single Family

The data indicates that no particular segment is performing any better or is immune to the overall health of the economy or the market. Sales prices were recorded from the high $200′s to the high $800′s. Rare in the sense that prices have dipped below $300.0 and also failed to reach $900.0, or higher.

Last year we were seeing quite a bit of interest in some of the new projects going up around town. As a consequence, the median price increased for several months which was the antithesis of the overall market. Now we are beginning to see some of these buildings offer new incentives to buyers as the developers invent creative solutions to deal with inventory that is not moving.

Pasadena Townhomes Condo March Sales

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A Critical Key Indicator Is Housing’s Crystal Ball

February 28, 2008 By Leave a Comment
Pasadena Housing Stats

crystall ballIf the real estate market were on a fiscal year instead of a calendar year, the New Year would begin in March. With the onset of spring, the housing market has typically kicked into gear. We have recovered from the holidays, prioritized and set goals convincing ourselves that this year will be different. With the warmer weather approaching and the end of the school year, people are once again ready to shop for houses.

Or at least they used to be.

The Springtime Effect

I recently posted a graph depicting monthly sales in the Pasadena real estate market. It showed the seasonality in the market with sales peaking in the spring and summer months. Go as far back as 2002 and you get the same results. Set your watch. It was going to happen. Like clockwork.

Then came the spring of 2006 and interest slowly began to fade. The bull housing market began to loose its steam. It just wasn’t recognized as such. Maybe the market was just taking a breather. Housing slowed as the spread between adjustable rate loans and fixed rates began to move closer, eliminating affordability for many would be homeowners. No one expected such a swift and sudden stop. At this point, the housing market only had one strike against it. We weren’t prepared for the next two 95mph fastballs, known as the sub-prime crisis and the increasing rate of foreclosures. Both of which came in high and inside. Strike two, strike three.

Inventory Levels to Be Key

As you can see, people will take their property off the market at the end of they year as evidenced by the two dips in January. Listing inventory began to increase late January 2007. It is beginning to rise again and apparently earlier this year than last.
Pasadena Housing Stats current Pasadena inventory levels (single family) as of 2/25/08

The rate of homes sold to current inventory will be a critical calculation and will determine the course of the market for the remainder of 2008.

If inventories begin to rise and we do not see a proportional rise in the number of homes sold, Sellers will be forced to take a more aggressive approach, putting more pressure on listng prices.


Currently in Pasadena we have approximately a 9 to 10 month supply of houses on the market for sale. If you are a home seller and that number continues to grow, be patient. The prospects for this year are not likely to be any better than 2007.

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Pasadena Home Sales – A Three Year History

February 12, 2008 By 2 Comments
Up2date pasadena home sales

Used to be if you studied the real estate market at all, you could predict when the best time would be to sell your property. During the boom years of 2000 to 2005 the selling season would typically get started in April and run through September. This defined the true Seller’s Market. Put your property up for sale and it was usually sold in 2-3 weeks, maybe for even more than the asking price. Buyer’s understood that they could not make unreasonable demands on the seller, the house was being sold “as is”. Someone was usually standing in line to replace them if they decided to exit or were forced to leave. There was a definite answer to the question “When is the best time to sell my home?” The last couple of years however have been different. Now it’s anybody’s guess as to whether or not the spring selling season will return.
Up2date pasadena home sales

Residential Sales Defined

The above chart recaps sales of residential units by month. Let me say that there were a couple of assumptions made. Sometime last year the i-Tech MLS (Pasadena) was combined with the MRMLS (Arcadia/Monrovia) which resulted in some duplication. Spot checks indicated about 10% of the results were reported twice, so adjustments were made. Secondly as I reported in the article about Pasadena real estate our primary source of information is the i-Tech MLS which covers the majority of sale transactions in the Pasadena area.

Now with that said and the formalities out of the way you can see that our real estate market peaked in August 2005. In 2005, there were approximately 1817 sales of residential units including single family homes, townhomes and condominiums. That number dropped to 1602 in 2006, a decline of almost 12%. Then last year it dropped to 1262 units, a 21% decline from 2006 levels. Now if there are 555 fewer homes being sold these last two years at a median home price of $575,000 that equals $319,125,000 in lost sales for 2007. That is serious money where I come from. From a tax perspective, the LA County transfer tax resulted in a loss of $3,510,000 and that is just for Pasadena. Now you begin to understand why Sacramento is in such a budget crisis. Well maybe we will never understand how Sacramento works, but we can provide some obvious explanations.

This Down Cycle Will Run Out of Steam

Periods of growth or decline define most business cycles. If the housing bull market ran for 5 years, the housing recession is not likely to work itself out in the next few months. The housing market needs some good news to help it back on its feet. Maybe gasoline at $2.00 a gallon would do it. It would sure help. If the hangover is preceded by the success and length of the party, then our head may hurt for a while. It was a great party.

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Pasadena Says “AMF” (adios my friend) to 2007 Real Estate Market

January 8, 2008 By 1 Comment
up2date pasadena SFR

The one good thing about the 2007 Pasadena Housing market… it’s over!

Home sales for the month of December went out with a whimper as there were only 37 Single Family units sold compared to 81 in December of 2006, a decline of 54%. Median prices however stabilized and held firm at $775,000.

Pent up demand surfaced in December of 2006 and it was uncharacteristically a strong month for housing. It seems we had a late year end rally that continued into January and February of 2007. Then the news regarding sub-prime surfaced in March. I would expect January and February to also run behind last years numbers despite some very favorable interest rates, simply due to the strength of last years sales results.

up2date Pasadena SFR

Townhomes & Condominiums

Sales of Townhomes and Condominiums remained fairly flat in terms of units, however we did see the median price fall from $545,000 last year to $459,000 in December ’07. This is a number that has seesawed back and forth this year.

up2date Pasadena townhome

Current Inventory Levels

Based upon these latest rates of sale, there is a tremendous amount of inventory on the market. Currently there is approximately a 10 month supply of Single Family homes for sale and almost an 8 month supply of Townhomes and Condo’s. These numbers are calculated based upon the absorption rate in our area. Anything over a 5 month supply is considered a Buyers Market.

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Median Home Price Declines in Pasadena

December 7, 2007 By 2 Comments
up2daterealestate November Condo/Townhome sales

Sales of single family homes in Pasadena, California continue to fall behind last year, but for the first time the median sales price declined to $725,000 in November down 4% from last years median price of $754,950. As stated before, we do see median price fluctuations in real estate from month to month, but we haven’t seen median price declines in a year on year basis. Apparently this is the first in quite some time.
up2daterealestatesinglefamily

Sales of Townhomes and Condominiums also fell behind last November in terms of the units that were sold. There were 29 units sold compared to 45 last year, a decrease of 35%. Despite the greater decrease in unit sales (compared to single family), the median price of a townhome or condo actually increased to $550,000 up from $494,000

up2daterealestate townhome condo

The market for townhomes and condominiums appears to be more resilient as properties are showing fewer days on market and selling slightly closer to their asking prices. Home Sales for the month of November are now posted.

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