Money and Investing Thoughts » Real Estate

Case-Shiller Data on California Cities

Tim — Thu, 29 Apr 2010 16:08:26 +0000

I noted with interest the year over year price changes for the three California cities on the Case-Shiller price data list. Here are the one year price changes through February of 2010.

Los Angeles: +5.31%
San Diego: +7.56%
San Francisco: +11.86%

The California market bottomed price-wise in April of 2009, so these numbers should continue to improve for the next two months. By then we will be in the summer buying season. Will perception become reality and the public start to believe California home values are rising?

There are numerous economic factors that should be holding back California real estate. But the trend tends to be self sustaining. How much will and upward price trend start to change the attitudes in California? Time will tell.

The future for commercial real estate

Tim — Tue, 16 Mar 2010 13:17:53 +0000

This video is a little old but I found the content interesting. Especially the last minute. If these REIT companies can get their hands on distressed bank held commercial properties, they appear to be able to make some nice returns. One would assume that the banks see the same potential if they can hold on to the property and maybe squeeze some more cash out of the borrower before they go belly up.

Surprising 2009 results for California real estate

Tim — Wed, 27 Jan 2010 15:42:03 +0000

Southland home sales up; median levels off.

The California real estate market continues to exist under the dark clouds of increasing foreclosure, bank phantom inventory and growing unemployment. In spite of these factors, the state managed to produce some very positive results in the larger markets. Way back in the dark ages of 2008, pundits and their hosts of commenters were adamant that the real estate market would be have reached a bottom until year over year price gains were experienced. Check out these results:

Southern California

SoCal finished 2009 strong with the median December price was 4% higher than in December 2008, the first year-over-year gain since August 2007, when prices were nearing the recent peak. December was the 8th straight month of monthly price increases. The number of December sales was 12% higher than a year earlier.

The increase in meidian price can be attributed to more sales in higher priced areas and less emphasis on the inland, repo market. 20.2% of th 22,338 December sales were for prices greater than $500,000.

Almost 25% of the purchases in December were for cash. Buyers with real money are very interested in homes at these price levels. The average mortgage payment for those who financed was $1,231 per month, 54% below the 2007 peak.

San Francisco Bay Area

According to DataQuick, the Bay area finished 2009 well ahead of 2008, price-wise. The median purchase price of $380.000 was 15% higher than in December of 2008 and 35% above the median low set in March 2009. Real estate experts are starting to believe that history will soon show Spring of 2009 as the market bottom.

According to the records, 22.7% of the homes sold in December 2009 were purchased for cash. The number of sales in the area was 13.6% higher in December 2009 than in the previous December. This market is still skewed towards lower priced homes with most of the sales going at FHA qualifying levels.

Sacramento Region

In the Sacrament region and especially in Sacramento County, foreclosures continue to hold back value gains. Sacramento County finished 2009 with the median price 0.6% above December 2008. Pricing was stronger during the last half of the year and the median foreclosure sale value increased by 4% in December over November. Mike Lyon, the owner of the largest real estate broker in the region had this comment:

…..prices for homes under $300,000 continue to appreciate at rates seen before the 2005 real estate market crash. “We do not see this slowing in the near future until interest rates rise by midyear”, said Michael Lyon, CEO of Lyon Real Estate.

2010

Foreclosures yet to hit the market continue to be the wild card for California prices. In the Sacramento area foreclosures hitting the market wer 22% higher than in December 2008 and 2010 the number is expected to exceed the 2009 levels by 15%.

California home prices show year-over-year increase!

Tim — Thu, 24 Dec 2009 15:44:53 +0000

C.A.R. November sales and price report.

This just in from the California Association of Realtors: Home sales in November were 4.7% higher than a year earlier and the median price was 5.8% higher. That’s right, the median price was almost 6% higher than 12 months earlier!

Housing, especially in California still has a lot of issues to work through, but it is important to note these gains came in a time of serious government problems and unemployment rising to over 12%. The prices that banks were selling repo’d properties for were just too low and smart buyers were snapping them up and either selling for a quick profit or holding for a longer term recovery.

The positive price trend has been on since March-April 2009. Will buyers continue to look for bargains and compete for available inventory or will the “shadow inventory” overpower the number of willing buyers? Time will tell, just nice to see some positive numbers.