Wednesday, July 9, 2008

Homedata Corp: Condo sales doubled in June. Home sales rise.

LA Business Journal reports:

"While sales activity normally picks up going into the summer, June’s increases far exceeded the typical seasonal surge, especially in the condo market. It also exceeded a smaller surge two months ago before sales subsided again.

There were 1,254 condo units sold in June, up 115 percent from May. That was the largest number of condos sold in one month since July 2007, though sales were still off 4 percent year over year, according to data provided to the Business Journal by Melville, N.Y.-based HomeData Corp.
One reason for the surge: price. The median price of a condo that changed hands in Los Angeles County fell 12 percent year over year to $386,000.
Meanwhile, there were 3,332 new and existing homes sold in June, up 30 percent from May, but down 28 percent from year-ago levels. The median price fell to $429,000 – its lowest level since October 2004."

To give this "surge" in sales some perspective, here is May 2008 Condo chart for the SFV valley:

As you can see a doubling of sales would still put sales in a historically weak position. The spring selling season is clearly a bust for Condos and only big price cuts can even begin to start to absorb the significant supply coming on line in the Valley. Year over Year comparisons remove seasonality from the equation and we see that YoY comparisons are very weak for home sales. It will be interesting to see how the SFV fairs, it has been doing better than other parts of L.A. County because it started falling earlier and faster than other regions. May's pending sales were off a bit for homes and up for condos so we will see at the end of next week how the official SRAR stats compare. For sales stats that combine condo and home sales you should see a big drop in median prices as the ratio of home to condo sales normalizes, with the cheaper condos dropping the median price (In other words, the low median prices reported lately have been under reporting the severity of the decline because the number of houses selling was greater relative to condos). One other report to keep an eye out for is Dataquicks foreclosure reports for the 2nd Quarter, it should be out in a couple weeks as well.

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