Wednesday, December 17, 2008

San Fernando Valley November 2008 home sales report

The official November 2008 numbers are out. Homes sales (SFH) came in at 633 (my estimate was 630) which was down 15.03% MoM and up 78.31% YoY. Median price came in at $375,000 (my estimate was 385,000) which is down 8.54% MoM and down 32.74 YoY. SFH median prices are currently down $280,000 from the peak or -42.7%. October and November of last year were the weakest months of the year due to the lenders pulling away from securitizing mortgages and Countrywides famed troubles so the year over year comparisons are easy to beat. Sales are still weak and prices continue to fall.

Condo sales came in at 199 (my estimate was 202) which is down 14.95% MoM and up 41.13% YoY. Median price came in at $220,000 (my estimate was $245,000) which was down 2.22% MoM and down 41.33% YoY. Condo sales are still performing horribly despite massive declines. Considering all the condo projects in the valley this doesn't look to reverse anytime soon.

Here is the Back on Markets relative to sales, this months pendings and last months pendings. I am trying to find the best representative way of showing how pendings falling out of escrow are affecting sales.

Sales for November totaled 832, escrows opened in November totaled 951 and BOM came in at 355. Based on current pendings and BOM ratios compared to previous trends Decembers total sales (SFH + Condos) should come in around the 650 range.

As the PMI changes take affect combined with the Jumbo conforming limit dropping we will see the mid to high level market taking the brunt of declines. People wanting a loan above the Jumbo conforming limits will pay a high premium and the people wanting to pay less than 85% LTV on a Conforming Jumbo will have to go FHA which can be restrictive. From what I am seeing is an inkling of what is to come in some of the data. You see the conforming loans staying liquid and closing pretty well. Above the conforming limit there is this logjam of contingent homes waiting to close, I am assuming besides the normal bank delays for short sales and REOs that financing is an issue and people are working to get deals closed before buyers give up. This may have contributed to the decline in median due to mix shift. The higher up the price range you go the less demand is able to be effective.

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