February Rains Affect Home Sales

What does rain in Pasadena have to do with basketball in Kentucky?

I had the opportunity to live in Louisville, Ky before moving to California. Louisville is a great town with big city attractions and a small town feel. Basketball in that part of the country is a way of life. If you needed to do something, just wait until the University of Kentucky or the University of Louisville was playing basketball on TV. Nobody was out, the town shuts down.

Much like Los Angeles in the rain.

February was a wet month here in Southern California. The report on the radio said it was the wettest February in 50 years. March may not be too far behind with rain expected the first week.

Pasadena YTD Home Sales

Looking at the first two months of the year and trying to see any trends or predict any outcomes is very premature, but somebody has to do it. Real estate activity here in Pasadena really begins to kick into gear at the beginning of April, so the first quarter is similar to a golf tournament. Anyone can lead after the first round on Thursday, but who has the game to finish the round on Sunday?

Pasadena February Home Sales

Single Family

Sales of Single-family homes, which is really the barometer of the real estate market were flat. We have not seen any real changes in the number of units sold in 2019 vs 2018. What did change however was the median price. It fell from $944,000 last year to $$902,400 this year.

A decline of 4.5%.

With only a small sample of less than 100 homes, it could easily be a mix issue. Homebuyers who have been trying to buy a house for a few months have been told to wait until the market slows down, there will be less competition, fewer multiple offers and possibly more available inventory. In other words Dec-Feb. Higher end buyers may tend to fit the more traditional “selling season” and decide to wait until closer to the end of the school year, electing to postpone a buying decision until the April-June period.

Condominiums and Townhomes in Pasadena

Now take the numbers you just read above from left to right, and read the sales results for Condos and Townhomes from right to left.

In other words, these numbers were opposite those reported in Single-family.

Unit sales declined from 66 last year to 51 this year (23%), but the median price increased to $640,000 from $605,000, or 5.5%.

Possible reasons for the increase in median price is all of the newer homes being constructed are $700,000 +. Developers are not building any low-income units for sale. And with the lower sales units being recorded a few higher end sales can make the median price higher.

Analyze This

I have provided my thoughts on what is happening in the market but we all know what opinions are like. So I would encourage you to make your opinion known. At the end of every business day someone somewhere tries to explain the stock market and why it was up or down. Reasons such as inflation fears, trouble in the middle east, low earnings reports, etc., etc.

Post your comments on social media using the hashtag #up2datereasons.


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