There has been much speculation on where the Pasadena California real estate market and home prices are headed. And also, to what extent have values declined? The median price has dropped, but to what degree have Pasadena property owners experienced a loss?
Symptomatic of falling home prices are a couple of things:
- Supply far exceeding demand resulting in fewer homes being sold, requiring sellers to become more aggressive with pricing
- The re-emergence of the under $400,000 market
Both charts below show the same data only graphed differently. The first chart indicates monthly median prices expressed on a continuing line. The bottom chart shows values by calendar year. Looking at the first graph, prices rose steeply from 2004 through 2006, from about $480,000 to $710,000, or roughly an annual increase of 14%.
Charting monthly median prices tends to contain quite a bit of volatility. Who would have thought that the highest median price would have been recorded in December ’06? Remember too, that these points represent when a property was sold. Since the escrow process can be 30 to 60 days, one must look at the numbers and attempt to figure out why one month was so much better or worse. What event happened in March that could have impacted the May sales results?
Personally, I am not to worried with the monthly variances in value from month to month. I am more concerned with a rolling 12 month analysis. The change from July ’08 compared to July ’07 is more important than the difference from June ’08 to July ’08.
Are Pasadena Home Prices Leveling Out?
The last three months of this year show that median home prices have been very consistent with little or no variance. Could this be a sign that the market is beginning to turn around? Since more homes are being sold under $400,000, the market activity above $700,000 for a single family home and $477,000 for condo and townhome needs to stabilize. These are the latest median Pasadena home prices. With price decreases still looming on property listed for sale and the days on market in excess of 100, it does not appear that prices will even out anytime soon. Plus, we will need to see at least 125 units sold per month. Currently we have been experiencing less than 100 monthly units since September ’07.
My opinion is that for the next several months ….advantage home buyers. Market cycles are not likely to turn around in one year’s time. There just have been far too many body punches that will continue to keep the market down for the count. My guess is that we are in round 8 of this 15 round bout.