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alstry (35.49)

So CA Home Sales Crash in March

Recs

9

April 15, 2008 – Comments (6)

Numbers from the Southern California Multiple Listing Service show that total proceeds from home sales last month amounted to just over half of what home sellers reaped in March 2007, the Pacific West Association of Realtors reports.

Orange County homebuyers paid $927 million to buy 1,409 homes purchased through the MLS last month, compared to $1.8 billion in total proceeds paid in March 2007, SoCal MLS figures show. That’s a decrease of 48.6%.

http://lansner.freedomblogging.com/2008/04/15/value-of-home-sales-fell-486-in-march/

DOWN 48.6%!!!!!

They call that a depression in many circles.  That is over $50 million in income not received by RE brokers.  That means about half the income of RE brokers has evaporated in just a year.  Add in lawyers and title companies and mortgage companies and the numbers grow very fast.  Millions not received by the state for transfer taxes.  We could go on and on.  Revenues and incomes are contracting all over the country at an incredible pace.  Retailers are going bankrupct or shutting down due to shrinking sales:

The consumer spending slump and tightening credit markets are unleashing a widening wave of bankruptcies in American retailing, prompting thousands of store closings that are expected to remake suburban malls and downtown shopping districts across the country.

http://www.nytimes.com/2008/04/15/business/15retail.html?hp

The spillover has not left the office market unblemished either:

Voit Commercial Brokerage says economic uncertainty hit the O.C. office market in the first quarter, with vacancies rising into double-digit territory while lease rates and construction declined. (CLICK HERE for the full report.)

Among the highlights:

The vacancy rate was 13.82%, up 63% from the first quarter of 2007, when rates were a near-record low of 8.47%

http://lansner.freedomblogging.com/2008/04/14/slowdown-hits-oc-office-market/

 UP 63%.  And that doesn't factor the continued slowing into March.

I am not sure we have ever seen contraction at this pace ever.  But we have never faced a credit crisis of this magnitude ever before either.  Wealth is evaporating daily as house values collapse, commercial RE values implode, and bond values shrink.

Now we face rising commodity prices and falling income.  Oil reaching levels never seen before.  Food riots breaking out all over the world, World Leaders saying this downturn will be protracted, and Goldman saying near term profits will be "awful."

What do you think, we are at the bottom?

6 Comments – Post Your Own

#1) On April 15, 2008 at 9:40 AM, EScroogeJr (< 20) wrote:

"Orange County homebuyers paid $927 million to buy 1,409 homes purchased through the MLS last month"

But wait, this is about $650,000 per house! Where is the crash? The volume is down, yes. Not too many homeowners willing  to sell into a correction. But the prices? Not down by much. The Californian housing racket is as alive as in the bad old days of 2006.

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#2) On April 15, 2008 at 10:03 AM, alstry (35.49) wrote:

Actually, you mathematically can't make any materially probabtive determination about price movement by average price sold.

If houses that were selling for $100K are selling for $600K, then prices are skyrocketing.

If houses that were selling for $2 million are now selling for $600K, then prices are crashing.

My guess, based on my ACTUAL experience, the latter is closer to reality than the former.  But if FloridaBuilder ever gets back from walking the dog, you can get independent confirmation.

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#3) On April 15, 2008 at 10:44 AM, EScroogeJr (< 20) wrote:

The actual median price in Orange county was not much higher nor lower than that. 650K is about it.

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#4) On April 15, 2008 at 10:52 AM, TMFBent (99.85) wrote:

Can't speak to Orange County, but prices on same-home sales are down mid teens in the whole LA region.

Here's da numbers.

Sj

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#5) On April 15, 2008 at 1:25 PM, alstry (35.49) wrote:

Median price of Southern California homes plunged 24 percent in March SAN FRANCISCO (AP) -- Newly released data shows the median price of Southern California homes plunged 24 percent during March in the latest sign of the real estate market's deepening distress.

A report released Tuesday by DataQuick Information Services says the slump has dragged down the median price of homes in a six-county area to their lowest levels in nearly four years.

The median price at the end of March was $385,000. The median price represents the point where half the homes sell for more and half sell for less.

The current conditions represent a sobering turnaround from a year ago when mid-priced homes in Southern California had hit a peak of $505,000.

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#6) On April 15, 2008 at 1:31 PM, alstry (35.49) wrote:

March home sales 59% below historyApril 15th, 2008 · 7 Comments · posted by Jon Lansner/O.C. Register columnist

Homebuying in March, by DataQuick’s math, hit its 30th consecutive month where sales failed to beat the year-ago level. History shows us that last month’s buying was 47% below a year ago and 59% below the average March since 1988. March’s median selling price was $506,000, down 19.6% vs. a year ago.

In typical years, March marks the start of the high shopping season, enjoys a historical buying surge vs. a typical February of 44% since ‘88. This year, though, the March bounce was only 13%. 

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