Good news on Southern California home prices
Southland home sales up; median levels off.
The October 2009 sales report for Southern California is all good news. The number of sales has now accomplished 16 straight months of year-over-year increases. The percentage of sale of foreclosure properties is dropping, allowing the median sale prices to increase. The median price per square foot has increased for 6 straight months.
Of particular interest, two counties, Orange and San Diego now have year-over-year median price gains. The average price on Orange county for October was almost 4% greater than in October 2008!
There has been a flurry of articles recently on Seeking Alpha concerning the hypothesis that house prices still need to fall about 25% to reach the historic trend line. The trend line commonly used extrapolates the price gains from 1990 until 1999 then shows how prices in the new century zoomed above the trend and have not yet fallen back to the extrapolated values. There is an interesting point in the press release linked above. The median mortgage payment, adjusted for inflation, is currently 46% below the average payment in 1989 and 55% below the typical payment in 2007. Current, very low mortgage rates have bottomed payments well below the historic trend line.
All that remains is to flush the remainder of the 2005-2007 inflated mortgages through the foreclosure system and a new bull market will start in the California real estate market. It appears the price bottom occurred in Spring 2009.
Has Las Vegas real estate turned the corner?
Home sales, median prices rise in valley – Business – ReviewJournal.com.
Median prices started to increase for most of California in late spring 2009. Las Vegas prices have continued to erode in the face of high inventory and a serious jobless problem. In October, the LV real estate market turned positive for both number of sales and prices.
Sales in October were up 5% from September and 30% higher than a year earlier. Of the 21,000 units inventory listed, only 8,000 are available without an existing offer. With 3,500 sales in October, available inventory is less than a 3 months supply. Bring on the phantom inventory!
Median prices increased in both September and October, gaining $4,500 to about $139k. Prices are still 26% below a year earlier.
The great question remains whether current and future foreclosures will short circuit the real estate recovery by flooding the market with bank owned properties. One commentator in to article above thinks so. I am waiting to see if this inventory actually materializes in mass or ends up trickling into a market of rising prices.
End of the recession
U.S. GDP rises 3.5% as stimulus kicks in – MarketWatch.
I think today’s GDP number of 3.5% gain in the 3rd quarter marks the end of the current recession. For background, the economy contracted at a negative 6.4% rate in the first quarter of 2009, shrank 0.7% in the second quarter and now has turned positive.
According to the government bean counters the recession officially started in December, 2007. Before this recession the post WWWII record length was 16 months. This one will be a record, but not by more than 6 or 7 months.
Remember that employment is the last factor to recover after then end of a recession. Typically it takes 6 to 9 months of improving economy before the job situation starts to improve.
Nixon resigns!
Great video on Nixon before his resignation speech. Too bad that side of the guy did not come across to the public.
Can I return to writing this time?
I have been meaning to get back to writing here and over at the Shipping Stocks blog for what seems like a couple of months. It has been a couple of months. Reason: I have picked up writing assignments elsewhere where I get paid!
Along the way I have been thinking about in what direction I would like this site to go. I have some ideas, but time will tell whether they can pan out. I do know I want to continue to opine about the state of real estate in California and Nevada. I want to put some focus on income stocks, now that stocks are OK again. I also want to put up some information about shorter term trading in the investment world. The last year in the market has shown me even longer term investors should be using some trader techniques to conserve capital and take advantage of opportunities.
My plans are to write an article a day, either here or at Shipping Stocks. Now I need to get caught up on my reading so I can put out some stuff of interest.
