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Was June the Turning Point for Pasadena Home Sales?

July 27, 2009 By 3 Comments

It had appeared the momentum in the Pasadena real estate market had been building. Sales were increasing, buyer’s were becoming increasingly optimistic, and sales were beginning to move away from just the lower end of the market.

The number of homes in escrow was increasing and stories were developing of multiple offers and quick sales. And we are not just referring to distressed properties. There is really no other term to describe the month of June than just an old fashioned “blow out”.

Almost every indicator showed a positive increase. the number of home sales increased 45%, the median price of a single family home was up almost $50,000 over last month. Even the townhome / condominium market which has been a major drag on reporting, sprang to life with approximately a 50% increase in the median price and unit sales over May.

Now that Newsweek has finally declared the recession over, I guess we have cause for celebration. Housing inventory, a closely watched barometer regarding the health and trends in the market is now down to about a 5.5 months supply.

It seems very puzzling to me that our local housing market can be so strong. Considering the local and national economic situation, what is it that is creating the demand for housing? Consumer confidence is not exactly at its highest levels but there is something that is driving people to buy houses.

What do you think it is?

Pasadena Homes June09 Aalysis
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Pasadena Home Sales Increase in May

June 14, 2009 By 1 Comment

Unit sales along with the median price make positive gains in May, continuing an upward trend in 2009.

Predictability, which was absent in the Pasadena real estate market during the last two years appears to be making a return. Predictable that is, when the seasonal home buying months once again become the months of May thru August. The median price of a Pasadena home exceeded $500,000 for the first time since November 2008.

The housing market which has exhibited some positive trends of late still offers a few inconsistencies. For example, the market for single family homes is outselling the condo/townhome market by a ratio of 2:1. In terms of months of supply, single family is about 6.75 months, and the condo market is closer to 10 months. Also sellers of condos and townhomes are having to be more aggressive in marketing their properties, evidenced by the final sales price achieving only 90% of the original asking price.

The catalyst for this market remains homes under $500,000. One of the most telling statistics is how the market has changed. As an example in May of 2008, only 13 homes sold at a price below $500,000. In May of this year that number increased to 28.

In the market for homes over $1,000,000 there were 18 homes selling in May 2008 and the number dropped this year to 11. Whereas “declining” used to be the adjective of choice to provide a one word label that summed up the Pasadena real estate market, I think the new word now becomes “shifting“.

Pasadena Homes May 09 Sales Report

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Pasadena Housing Market Comes Roaring Back

April 16, 2009 By 10 Comments

The Pasadena real estate market received a shot of adrenaline in March. For a patient that had been on life support for the last year and a half, the surgical team came in with a prognosis of “cautiously optimistic”. The medication came in the form of lower mortgage rates and an $8000 tax credit for first time home buyer’s. The increase from February to March was one of the biggest we have seen in 5 years. Prices always fall, even ever so slightly for this time period. But not this year. They rose about 10%. Pasadena home prices apparently are beginning to reverse two years of declines.

Think about the impact of the $8000 tax credit. How long does it take to earn $8000 in salary? For someone who was waiting for prices to become more affordable they in essence have hit the housing lottery. Interest rates are below 5% and taking into consideration the incentives available, the housing dollar is going a long way compared to historical standards.

Nearly all of the key housing indicators are turning positive and I guess I should preface that by “depending upon your situation”. But what happened was, inventory is coming down, selling times are decreasing, homes that are in escrow are pointing to higher sale prices. The check and balance in the report also indicated that condominium and townhome prices are stabilizing and appear to be coming out of hibernation. The median price of a single family home ticked considerably higher after months of declines rising about $100,000 from our last February sales report.

It’s great to see what happens when pro-growth policies are implemented and the turnaround that can occur. Sacramento, are you listening?

All of the key analysis comparisons are contained in the report below. Click the icon in the lower right hand corner to view it in full screen mode.

Pasadena Homes March up2date Sales Report
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Pasadena Real Estate Market Feels January Slump

February 17, 2009 By 2 Comments

The optimism that precedes a new year was short lived at least where Pasadena real estate is concerned. Let’s face it, when it comes to real estate activity, January is, well January. This time of year is supposed to be unexciting and uneventful. From that standpoint the month certainly lived up to its expectations.

I am beginning to read some articles about other real estate markets across the country, showing some signs of life. In fact a Seattle Broker created quite a stir last week when she announced the end of declining values in her market. She observed that properties priced 20% under their 2007 summer peak were all selling. However, if you look at the peak here in Pasadena, it occurred in December ’07 at $710,750. A 20% decline would have been $568,600, which would have occurred around August last year. Our prices have fallen every month since then to a current median price in January 2009 of $429,000, or 40% off of our December ’07 high.

Pasadena Home Prices

Explaining the events in January can be summed up in a couple of points:

  1. The number of single family home sales were 30 units compared with 28 units for condo/townhomes. Of the 57 housing units that were sold, 75% of them were sold below $600,000
  2. Previously single family units had outpaced condo/townhomes by about a 2:1 ratio. This month however the ratio of single family to condo/townhome was almost 1:1. The median price of a condo was $415,000 which pulled down the overall median price.

Pasadena Outlook

The median prices of homes in escrow is indicating a trend still towards lower prices. The month of February is probably less exciting than January; however with a median price of $429,000 we are very close to reaching the bottom ourselves.

Pasadena Homes Jan09 Sales Report
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Are Pasadena Home Prices About to Bottom?

December 16, 2008 By 3 Comments
Pasadena Home Sales

Do any similarities exist between the real estate and stock markets?

In stock market jargon it is referred to as testing the bottom or testing the lows. If prices hover around the previous lows without establishing a new benchmark it can be recognized as a positive sign. It may be perceived that price stabilization will occur and that the free fall is over, at least for a while. Maybe it’s just a psychological barrier more than a realistic barometer of market indicators, but sometimes all that may be needed is some innocuous event indicating a market change.

Home prices in Pasadena hit a four year low in October 2004 and then took on a meteoric rise for the next 49 months before returning for a landing in November 2008. With Pasadena home prices in a downward spiral the last couple of months, there seems to be returning momentum in the housing market. Momentum however is a relative term when compared to the recent events of the last few months.

Increased activity has been precipitated by declining interest rates, motivated sellers and plenty of property to choose from. If you were aiming to buy a house a couple of years ago and were priced out of the market, today’s events must be looking pretty good to you.

Look for December home prices to modestly rise or at the very minimum, at least stabilize. Home prices have been known to rise in December if the previous months activity has been slow as evidenced by December 2006 in which prices jumped considerably over the preceding months.

Pasadena Home Sales

A Discriminating Real Estate Market

The new real estate market is going to pick and choose who benefits. You would think with very favorable interest rates that a re-fi boom would be in the works. Not necessarily so. Consider the plight of the self employed. Today’s refinance rules are based upon one thing….. does your income fall in line with the debt to equity ratios of your new loan? It doesn’t matter that you have never been late on a payment or that your current payment is higher than your new lower refinanced payment would be. Forget credit scores, anyone ever heard of FICO! Now you have to pay to play.

And if you were thinking about a construction loan to build your dream house. Well it seems that you can forget that too. A conversation with a direct lender last week informed me that construction loans were harder to find than consumers paying full retail this holiday season!

I don’t know about you, but I am sure glad the $700 billion federal bailout has retuned a sense of normalcy to our credit markets.

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