Pasadena Home Sales – A Look at 2015

Greetings from Pasadena

The call came in mid-late 2007 as I was sitting at my desk in the office. Pasadena real estate was about to change.

Everything was about to change.

The person on the other end of the line said “The lender has denied our loan”.

This would be my formal introduction to the very early stages of what became our greatest financial disaster since the Great Depression.

Certain words or events can create lasting results and memories and stay with us forever. We remember where we were, who we were with along with the event that will conjure those specific feelings be it positive or negative, forever.

I vividly remember where I was when the news came that Elvis had died, or how I felt walking out of the business building and down the steps after taking my last college final, spending the night in the hospital waiting for our daughter to be born.

I remember where I was when I answered the phone and heard “The lender has denied our loan”.

It doesn’t seem it has been over eight years.

A Distant Memory

House values in Pasadena have increased considerably over the last few years. I have included several tables to show you what has been happening in terms of unit sales and median home prices. I have also included a breakdown by zip code so you can see the activity in a particular area. Depending upon your position (either a buyer or seller) you will be very pleased or disappointed with what the data indicates.

Home buyers and sellers have benefitted the last few years from the low cost of borrowing money. When interest rates are attractive, people will buy homes. Low interest rates allow consumers to get more home for the dollar albeit they home they are buying has seen increased appreciation which includes double-digit growth.

2015 Doubling Down with Increased Prices and More Homes Sold

The median price of a Single Family home is Pasadena continued to increase in 2015 to $785,000, an increase of 4.6% over 2014’s median price of $750,000.

This is on top of a 10% increase in 2014 and a 15.4% increase in 2013.

Could it be about time for the market to take a breather?

Consider this…Unit sales in 2015 increased 8%, yet prices only increased about 5%.

Why Could 2015 be a Benchmark Year?

Could this potentially indicate a slower market in the coming year? With both units sold and the high level of median home prices, it’s hard to imagine we could have another year just like 2015. My guess is prices will stay at current levels, but unit sales will be more in line with what we had in 2014.

As sales prices continue to rise affordability is reduced, resulting in a smaller pool of available buyers.

“If median prices are YEN and units sold are Yang, then I think we are at ZEN”…. ancient real estate philosopher

In 2013, housing sales increased substantially. What made this year so different?

According to Bankrate it appears interest rates had a major impact in the number of homes that were sold. In 2011, interest rates peaked around 4.75% before going into a nosedive and hitting 3.5%.

So as rates were coming down, more people were entering the housing market and apparently were more than happy to move up and spend their new found equity that many thought was lost forever during 2008-2010.

From years 2013 to 2014, there was a decrease of 13% in the number of homes that were sold, but prices increased 10%. This raises an interesting point.

What Happens when Home Prices in California Rise?

According to this article in Forbes rising home prices make Jed and the family load up the truck and move away from here. California is not the place you want to be.

Further supporting the argument that we will see few housing units sold in 2016.

Rising property values drive residents to other states with more affordable home prices.

Pasadena Single Family Home Sales & Median Price

YEARUnits SoldMedian Price

To further reinforce less price appreciation in 2016, there is evidence that certain zip codes are starting to show signs of weakness. The 91107 & 91106 zip codes showed declines in their median price last year, whereas all zip codes had increases from 2013 to 2014.

Unit Sales by Zip Code


Due to more affordability the 91103 & 91104 zip codes did experience growth in both units and dollars, the 91105 zip code is more difficult to rationalize.

Median Price, Median Square Feet and Average Cost per Square Foot by Zip Code

201320142015Median Sq FtAvg $ per Sq Ft

Correctly Pricing your Home is Important

Of course you want the most money from the sale of your home, but the method you need to employ may be considered a little unconventional. Take for instance the home seller who thinks their home is worth $715,000 and will not accept a penny less. There are three ways to market the property. The first one is the homeowner who says they want to list it a little high, because they can always come down. The price they choose is $750,000.

The second method is to list it at market price which is $715,000. The last and best strategy is to list it at $699,000. Why?

As you can see from the image below, homes that are sold in the first 30 days, achieve 103% of the asking price, which in this case the final selling price will be $720,000. The benefits are obvious. More people will be attracted to the house, due to its less than market price, and multiple offers are much more likely increasing the selling price.

As you can see, the first 30 days your house is on the market is prime time. With 40% of the home sales taking place, this is where you want to be.

0-30 days31-60 days61-90 days91-120 days120 + days
# of Homes Sold3862971326891
% of Homes Sold39.6%
Average Selling
Price to List Price Expresses as a
A Percentage

Yet despite this data, some people still believe a higher listing price will ultimately mean a higher selling price.

It does not.

It will actually mean less. Again the graph shows the longer a property sits unsold, the less money it eventually brings. Your house, your decision.