Tuesday, March 17, 2015

DataQuick: Southern California February Home Sales down 3% Year-over-year

by Bill McBride on 3/17/2015 05:24:00 PM

From DataQuick: Southern California Home Sales Dip Year Over Year Again; Median Price Edges Higher

CoreLogic® ... today released its February 2015 Southern California housing market report, which shows the number of homes sold rose slightly from January but hit the lowest level for a February in seven years. ... A total of 13,650 new and existing houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in February 2015. That was up 0.7 percent month over month from 13,560 sales in January 2015, and down 2.7 percent year over year from 14,027 sales in February 2014, according to CoreLogic DataQuick data.

"This feels a lot like early 2014, with home sales off to a slow start as many would-be home buyers struggle with inventory constraints, credit hurdles and reduced affordability," said Andrew LePage, data analyst for CoreLogic DataQuick. "And just like a year ago, one of the big questions hanging over the market is whether we'll see a sizeable jump in inventory this spring and summer. A nearly three-year stretch of price appreciation has given many more owners enough equity to sell their homes and buy another. Recent job growth has helped fuel housing demand and if that’s met with only a modest rise in the supply of homes for sale it will put upward pressure on prices. Of course, the direction of mortgage rates, among other factors, will also play a role in determining how the housing market shapes up this year."
...
Foreclosure resales represented 6.0 percent of the resale market in February. That was up from a revised 5.7 percent in January 2015 and down from 6.7 percent in February 2014. In recent months the foreclosure resale rate has been the lowest since early 2007. In the current cycle, foreclosure resales hit a high of 56.7 percent in February 2009. Foreclosure resales are purchased homes that have been previously foreclosed upon in the prior 12 months.

Short sales made up an estimated 6.1 percent of resales in February, down from a revised 6.6 in January 2015 and down from 9.0 percent in February 2014. Short sales are transactions in which the sale price fell short of what was owed on the property.
emphasis added
A couple of key points: 1) the percent of distress sales usually increases in the winter months, because traditional sales fall off sharply - so it is important to look at the year-over-year change in distressed sales (down to 12.1% from 15.7% a year ago), and 2) we might see more upward price pressure unless inventory increases.