Beginning this month I am going to change how the monthly sales results are reported for the Pasadena Real Estate market. Instead of just looking at median prices, we are now going to overlay the price per square foot for the same period. Anytime you hear how sales are being reported in the media the focus is always on median prices. This year has been a very unusual year in the sense that sales of foreclosed homes in Pasadena have been a much bigger segment of the market. As a result the increased unit sales resulting from distressed properties tend to over exaggerate the decline in property values.
The advantage of adding the price per square foot is this measurement will trend along the same lines as the median price of homes sold, but the peaks and valleys are not as pronounced. By eliminating the highs and lows, you will see the natural progression of pricing as we move through the year and seasonality that Pasadena home sales experience. Now having said that the month of May price per square foot of $522 seems way out of line. I went back and checked my numbers and it appears to be at least $100 too high.
Pasadena’s Leading Housing Indicators
- Units Sold – The fact that unit sales rose quickly and seem to be declining just as fast is probably not cause for concern. It’s not uncommon for home sales to peak in July or August and then slowly decline through the end of the year.
- Inventory Levels – With a current inventory level of 4.4 months based upon the current rate of sale, inventory levels are very moderate if not on the low side. I wouldn’t anticipate much change as we approach the holiday season unless we begin to see more foreclosed inventory hitting the market. This could be more of a factor this year due to the moratoriums that were placed on banks foreclosing last year during the fourth and first quarters.
Overall the outlook for the Pasadena real estate market at least where residential is concerned is much more favorable than this time last year. The forecast for next year could be quickly forthcoming as Congress may or may not extend the $8000 home buyer tax credit. Since we may see the fed begin to withdraw from purchasing mortgage bonds, some type of incentive may be needed to continue the momentum in the housing market. Consumers have become accustomed to interest rates in the low to mid 5% range and without any incentive from Uncle Sam may be contented to sit on the sidelines and wait for the next program to come their way.
And now you’re up2date on Pasadena real estate.
The source for the market data used in the graphs is from TRENDGRAPHIX,INC.