Sunday, March 28, 2010

San Fernando Valley home sales report - February 2010

San Fernando Valley Single Family Home sales for February 2010 came in at 458 which is down 7.29% MoM and down 4.58% YoY. The median price for single family homes came in at $375,000 which is down 1.32% MoM and up 10.33% YoY. The supply constrained market is hurting sales in the SFV. Based on what I am seeing in the weekly inventory reports that doesn't appear to be changing anytime soon.

Condo sales came in at 190 which is down 6.86% MoM and up 17.28% YoY. Median price for condos came in at $227,000 which is up 5.58% MoM and up 8.09% YoY. Condos are faring much better than SFH because there is more supply due to all the new condo construction during the boom and it appears some buyers are choosing to buy a condo when they can't find what they want in a detached home.

The red line was my attempt to create a predictor for sales but it hasn't been working out so well since May of this last year. IMHO, it appears that some pendings are being double counted, instead of falling out and going BOM (which would reduce my predictor), they are just switching buyers and updating the pending date which gets them counted in the current months pendings again. This is supposition on my part since I don't know how SRAR constructs their numbers but nothing much else makes sense.


Anonymous said...

I can't believe prices of condos are going makes no sense. Where are people getting the money to buy? That's the million dollar question.

Effective Demand said...

First, prices can be falling and the median go up, it all depends on the mix shift of what is being bought.

That being said I think the condo market median going up is perfectly logical. It has more supply, people are "settling" for a condo over a house because the inventory for SFH is so low and so those buyers are buying the more expensive tier of condos. Thus the mix shift is different and the median is going up.

Anonymous said...

I can understand the mix shift part...I can't understand how people are affording them. They still need 20% down and still need to end up paying rather hefty mortgages.

Plus, if the median is going up, that indicates to me that the higher priced condos are what are being are people affording to buy with this utter mess of an economy plaguing us?

Effective Demand said...

20% down? 3.5% is the name of the game. The hefty mortgage is ameliorated by 5% interest rates. 12% unemployed is 88% employed. Plus LA county is a majority renters, a very big pool of buyers in which to tap.

There will always be buyers, sales volume is off telling you that prices are too high and the economy sucks. But there will still always be buyers.

I'm certainly no housing bull but I can see where the demand is coming from. The problem now is more where the supply is going to come from.