Pasadena Housing Statistics

Its time to check the pulse of the Pasadena housing market and analyze what changes are taking place along with what we might expect for the next several months. On one hand it seems the housing market is performing better than expected. Very attractive mortgage rates are encouraging people to purchase a new home. On the other hand, many commercial establishments and the space they once occupied are now vacant. The recent closings of several Old Town restaurants within the last week came as a surprise.

The source of the data used in the graphs is only properties that are or were listed for sale. It does not track closed transactions.

Pasadena Single Family Homes

We have been intently watching and reporting on median home prices in Pasadena. While the median price is a good “at a glance” type measurement, two other keys are prices per square foot and the number of homes that are having to take price reductions to get sold.

Real Estate Market Chart by Altos Research
Looking at the differences in the two markets (single family and townhome & condominium) we see that the price per square foot measurement for single family homes reached a low point around the first of May, while the price per square foot for condos and townhomes has been falling most of the year and might have just recently begun to show signs of leveling off.

We also see that the number of homes taking price reductions began to subside earlier in the year as demand started picking up. Currently the price per square foot on a single family home is around $417 and $389 for a condo/townhome. The month of May appears to have been a turning point and a benchmark month as visible differences began to occur and a market shift seemingly took place.

Pasadena Condominium / Townhome

Real Estate Market Chart by Altos Research

Inventory Levels and Percent of Property Re-Listed

Again in the two graphs below (single family top & condo/townhome below) inventory levels began to drop early in single family and much, much later in the condo category. The condo market was very slow to build any momentum at all. Now with inventory levels around 230 units and the number of units being re-listed declining, expect to see more of a balanced market with buyers losing some of their previous advantage over sellers.
Real Estate Market Chart by Altos Research

Real Estate Market Chart by Altos Research

What to Expect

There has been much speculation about what will happen with the $8000 first time home buyer credit expiring on November 30. At this point most think that some form of it will continue. Aside from that I believe the next six months will be positive in the housing market with interest rates remaining low, inventory levels running at about 5 months supply, and the number of sold units along with median prices flattening for a while.

Also there is a push for banks to become more agreeable in allowing home owners to “short sale” their home as opposed to going into foreclosure. This is a much better option and could help to ease Pasadena’s current count of 700+ properties in some stage of the foreclosure process.

3 thoughts on “Pasadena Housing Statistics”

  1. I’m surprised that the Pasadena housing market is doing this “well”. The current housing trend defies all logic and how much of it can last without the heavy government intervention. What is surprising is that you’re surprised by restaurant closings. The restaurant and retail sector has been getting killed. I’ve been consulting for a couple of local establishments and advising them on running promotions they wouldn’t normally in order to get volume. Restaurant and retail relies heavily on disposable income. High house prices don’t help businesses except for the few realtors and brokers closing the deals. Many banks are still giving out mortgages with DTI too high to be sustainable in my eyes, and these buyers are just too leveraged to do any real good for local businesses. The only way for these homeowners to be of value to local businesses is for us to return to the crazy money days so they can resume ATMing their homes.

  2. The point I was making is that despite all of the economic bad news real estate is doing much better than it was 1 to 1.5 years ago. On the other hand the retail sector seems to be doing much more poorly given the same time frames. It does seem odd that ther can be two sectors of the economy with such different paths. I think low interest rates (artificially low) are having a much more positive impact on real estate while unemploymnet and concerns about the economy are dragging down the retail sector.

    I guess it’s possible that homebuyers are eating in and wearing last years fashions.

  3. Well, you are right as far as the real estate strength vs. last year. If it continues past government subsidies and artificially low interest, then it will truly defy all logic… with the rest of the economy in such a mess. From the work I’ve been doing, newer homeowners (those who purchased within the bubble period) are really not contributing much to the retail/restaurant sector. To be fair, that same argument is true about many renters. The common bond I’ve found between the two groups is high debt loads. Since the data is still too new, I can only guess at this, but I would assume that new homeowners (unless they have very low or more traditional DTI) follow the same pattern as in the previous groupings. Without ever increasing home valuations, I don’t see new homeowners being a major contributor to local economic growth. Though I’m not really sure about home sellers that are making large profits off their homes. I’d bet they are saving their windfalls with a very small percentage spending.

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