DQNews: Southland home sales highest in eight months

That's the hope-filled headline according to DQNews. Digging deeper into the article, though, we learn that this was the weakest April since 1995, the second-lowest April that DataQuick has recorded, and 38% below the April average.

The boost comes from an increasing number of lower-end (below $500,000), mainly in the Inland Empire area (Riverside), where the bargain hunters are picking through the higher numbers of foreclosures. Of all the homes sold in April that were existing homes, 37.5% had been foreclosed in the prior 12 months. In March, that figure was 35.8% (revised). A year ago, it was 4.6%. Homes below $500,000 accounted for roughly 66% of sale volume gain from March.

Southland April home sales are down -19% from April 2007. Only Riverside county reported an increase in sale volume, very likely due to bargain hunting.

DataQuick stated that "a few more buyers stepped off the sidelines last month" to buy homes at substantial discounts to the peak. That sales would bounce in the Inland Empire, where foreclosures have particularly ravaged the area, is no surprise. DataQuick notes, "We continue to look for evidence of a sales bounce in the mid-priced and higher-end markets along the coast. If the higher conforming loan limits are making a difference in those areas it's certainly not a large one, at least not as of the end of April."

Prior to Day of Reckoning in August 2007, jumbo loan financing accounted for almost 40% of So Cal mortgages. For April that number was 15.1%. Southland buyers committed themselves to a typical monthly payment of $1,716, down from $1,816 in March, and down from $2,356 YOY. Foreclosures remain pegged at record levels, ARM financing is at a 6 year low, and non-owner occupied buying activity is increasing.

County          Apr-07   Apr-08   % Chng       Apr-07      Apr-08     % Chng
Los Angeles     7,225     5,016    -30.6%     $540,000    $435,000    -19.40%
Orange          2,682     2,166    -19.2%     $629,000    $500,000    -20.50%
Riverside       2,987     3,186      6.7%     $409,000    $295,000    -27.90%
San Bernardino  2,049     1,667    -18.6%     $370,000    $265,000    -28.40%
San Diego       3,436     2,809    -18.2%     $490,000    $400,000    -18.40%
Ventura           890       771    -13.4%     $572,000    $445,000    -22.20%
SoCal          19,269    15,615    -19.0%     $505,000    $385,000    -23.80%

Peter Y. Hong at the L.A. Times also covers DataQuick's release in Movement in weak Southern California housing market. He mentions that April sales are up 22% over March, which is not surprising considering the backlog of foreclosures on the market. According to DataQuick, the average increase in sales from March to April is about 1.8%.

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I can hardly blame the knife shoppers out in Riverside. A home for $295,000 must seem like a steal after they've fairly recently been selling for over $400,000. There will always be buyers who see prices reach a certain level and won't care if prices fall further. Then there will be buyers who think the market had bottomed and then find themselves bloodied as prices fall further. If the economy continues to spiral downward (after possibly a temporary election year bounce), I expect far more blood within the next few years. $295,000 still strikes me as pricey.

I'm getting the feeling that Redondo Beach remains in a slump. So far for the month there are 28 sales recorded for 90277 and 90278 in Melissa Data. For May of 2007 there were 118 sales recorded. Even if those 28 sales tripled by the end of the month, which I don't think is likely, that figure would still be nearly 29% below last May's sales volume. If I had to make a wild-ass guess, I estimate maybe 60 sales for May if this pace continues. Who knows, maybe Memorial Day weekend will bring out some buyers. Or maybe the end of the school year will bring out buyers.

At the same time, I'm recording about three new property listings a day. That may sound low compared to last year, but in 2007 my database was much newer and didn't have a lot of old repeats in it. This year, I'm noticing plenty of re-listings for properties that were listed back in 2006 and never got sold. I don't count those as new listings.

I mentioned in a previous post that I visited Ruxton Pacific last weekend (10th-11th). Last night (the 18th) at 6 PM I got a phone call from a realtor there. The weekend I visited, they had about 40 people drift through. This past weekend, it was about half that. I told her honestly but nicely no we were not looking to buy, we just felt that So Cal was too expensive. I told her that we were thinking of moving out of state, and when she asked, I named places. I even told her we are considering moving out of the country, which is also true. In short, we are still keeping all our options open, because it's still way too early for us to make any move. It was only fair to let her know that, and I hardly think we're the only ones who think that way. Plus, I figure if enough people tell the realtors that they aren't selling what we want, maybe something will change for the better.