Monday, April 07, 2008

Has Home Sales Activity Bottomed in Orange County?

by Bill McBride on 4/07/2008 10:17:00 AM

Jon Lansner at the O.C. Register writes: O.C. home demand rises for 1st time in 18 months

Deals to buy O.C. existing homes and condos are now above year-ago levels for the first time since Sept. 22, 2005, says the math of Steve Thomas at Re/Max Real Estate Services in Aliso Viejo. As of last Thursday, there were 2,285 deals created in the past 30 days, Thomas’ definition of demand. That’s 159 better (7%) than a year ago.
The following graph is based on DataQuick's sales data for Orange County.

Construction Spending Click on graph for larger image.

The graph shows the sales per month and the year-over-year change in the number of sales since the peak in activity. In Feb 2008, there were 1,471 sales reported in O.C., about 40% below Feb 2007. Feb 2008 was the weakest sales for February since DataQuick started keeping records in 1988.

Also note that many of these sales were Bank Real Estate Owned (REOs):
Of the homes that resold in February, about one-third, 33.5 percent, had been foreclosed on at some point since January 2007. A year earlier the figure was 3.5 percent. At the county level, the percent of homes resold in February that had been foreclosed on since January 2007 ranged from 25.3 percent in Orange County to 48.1 percent in Riverside County.
Note: DataQuick includes new homes sales.

The DataQuick numbers for March will be released soon, and I'm skeptical of the claim that the year-over-year change was positive in March.