Wednesday, January 21, 2009

San Fernando Valley December 2008 home sales report

The official December 2008 San Fernando home sales have been released. Single Family Home (SFH) sales came in at 691 which was up 9.16% Month over Month (MoM) and 73.62% Year over Year (YoY). Median SFH price came in at $353,000 which was down 5.87% MoM and down 34.26% YoY.

Condo sales came in at 231 which was up 16.08% MoM and 75% YoY. Median price for a condo was $225,000 which was up 2.27% MoM and down 31.82% YoY.

As we have seen previously distressed sales are in control and driving the market lower. The banks were clearly motivated in this last month of 2008 to get deals closed. Sales are still weak but are mildly improving as prices drop.

I'll have more on San Fernando Valley's December sales later this week.


Noz said...

I hope that 2.25% increase is not an indication of the market going back up so soon.

I think there's still a ways to go especially in the SF Valley..WAY WAY too overpriced still.

But you gotta love the downward slope of median price.

However, I've always been somewhat suspect regarding median price. Case in point, CAR was using a supposed rise in median price to get people to buy when prices were coming down a mere year or two ago.

What people didn't understand was that lower priced homes were dropping out of the market while higher priced homes were dominating sales relatively speaking. Well...that raised median price. At least that's how they used it.

Effective Demand said...

Median is more of an indication of what buyers are willing and able to pay rather than an indicator of values of homes. It tells you nothing about what the buyers are getting for their money.

I suspected sometime in the next 18 months when the mid to high end starts rationalizing in bulk the median will moderate its rapid decline due to the mix shift in homes. Depreciation will still be happening in large scale but the buyers would be getting more much for their money. Of course the economy could just keep spiraling down and prices along with it as people are not able to purchase. In that case we'd just see the same steady decline of the median we have been seeing.

Noz said...

What is your opinion on the Fed's ratcheting up of buying back mortgages to lax the terms for distressed owners?

They plan on having about $500BB by the middle of the year.

Do you predict a bounce up in prices? Or a continued decline?

I predict a decline...but I have friends (homeowners...surprise) who think the prices are going to go back up.

Cheers! And keep up the fantastic job of reviews and data!

Effective Demand said...

The purchasing of MBS is meant to keep long rates low. It will help cushion the down side but I think there is a bit of pushing on a string here. You can't force people to take on debt.

I'm not a 100% sure but I think these Fed purchases are designed for to facilitate new originations not take old MBS off the books. If true these purchases won't be helping the the underwater homeowner modify their mortgage or refinance. It will just help those with equity or wanting to buy get (or keep) a home with lower monthly costs.

Noz said...

Sounds good to me!