Thursday, April 19, 2007

March sales slower than normal

Housing market continues to slide across Southland

Closed sales were off too, down 24.7 percent to 999, according to La Jolla-based DataQuick Information Systems, which tracks real estate activity across a six-county Southland region.

By contrast, the Southern California median where half the prices are higher and half lower rose 4.6 percent to a record $505,000, but sales were down 32.4 percent to 21,856.

Ventura County's median-price decline was 2 percent worse than San Diego County's 4.9 percent drop, according to DataQuick. The local median home price typically tracks a little behind Orange County, which reported a 0.6 percent increase in March to $629,000.

An economist said March's bleak numbers reflect his prediction last fall that 2007 Ventura County real estate prices will either decline slightly or be no better than flat.

Some real estate brokers said they believe ongoing media coverage of troubles in the subprime lending market is causing would-be buyers to hesitate in hopes prices will fall further. Others said it's still a little early for spring buying activity to kick in.

"This could just be one month. I wouldn't base the trend, this particular thing, on one month," said Mark Schniepp, director of the California Economic Forecast Project in Santa Barbara. "It's down a little bit steeper, but that could have been the mix. Maybe there were more condos sold and that tended to drag the median price down ... Call me next month when the numbers come out and we'll see if we have a trend."


View of the Southland

Southern California's real estate market is sending mixed messages with last month's sales hitting a 10-year low for March while the six-county median topped $500,000 for the first time, DataQuick reported. And the Southland's median price increase was attributed to a downturn in sales of entry-level homes.

March sales were slower than normal in the Conejo Valley, but offers and listing activity turned brisk as April began, said Glen Scalise of Century 21 Rolling Oaks Realty in Thousand Oaks. Media coverage of increasing foreclosures and subprime borrowers who are having trouble making mortgage payments, he said, are causing some buyers to wait in hopes that many more properties will flood the market and force prices to plunge.

"Our inventory has started to climb a little bit just like I suspected, and our pending sales are up just a hair," he said. "I think they would be up proportionately had we not had all this bad news."

Tony Deleo, broker at Main Street Realty in Ventura, said he thinks DataQuick's estimate of a 24.7 percent sales volume decline is too conservative. "My estimate would be 40 percent," Deleo said, "and I believe the median price is off way more than 6.9 percent."

Ventura had 506 active listings Thursday, including 118 that were in escrow, he said, while Oxnard had 1,056 properties listed with only 160 in escrow.

"That's almost a seven-month supply," Deleo said. "I think this will be the year that the market will clearly bear out my prediction that it will retrench itself."

Homes priced at $525,000 or less are selling fairly well, he said, because entry-level buyers are still active locally. But the market for homes priced from about $550,000 to about $1 million is soft. High-end properties are still selling.

"The affluent people who have money, they're going to buy under any circumstances," Deleo said.

Another Realtor said he had no explanation for why Ventura County prices fell more than those in other Southern California counties, but he does not believe the March downturn indicates a trend.


"My perception has been that there is a little bit of a slowness maybe caused by the tax season and maybe the spring buying season hasn't started yet," said Joe Virnig, president of the Ventura County Coastal Association of Realtors.

"The numbers could show a slowdown that was significant 11 months ago. It's just now all being added into it, not really reflective of just last month's activity ... Not that much has happened over the last month for there to be a decline in one month like that."

Monthly mortgages are up

DataQuick reported that 21,856 new and existing homes and condominiums were sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was up 23.6 percent from 17,680 in February, and down 32.4 percent from 32,320 in March 2006.

Last month's sales were the lowest for any March since 1997, when 20,024 homes were sold.

"Both lenders and buyers are being more cautious, the dicey mortgage financing has all but disappeared," Marshall Prentice, DataQuick's president, said in a prepared statement. "It's becoming apparent that a lot of the 2004-05 buying activity was drawing from the future, and that future is now. A lot of demand was pre-met, otherwise these low sales counts would have put more downward pressure on prices by now."

The typical monthly mortgage payment that Southland buyers committed to last month was $2,326, up from $2,303 the previous month and up from $2,297 a year ago, DataQuick said. Adjusted for inflation, current payments are 8.9 percent more than typical payments in the spring of 1989, the peak of the prior real estate cycle.

Conejo Valley Association of Realtors President Allen Reznick said he had not yet seen the Thousand Oaks area's March prices, but the market looks normal to him. If prices were down last month, he said, it probably indicates more condominiums were sold than normal. Entry-level buyers would purchase most of those, and they are not used to the market.

"People have a lot of choices right now," said Reznick, a broker at Aviara Real Estate. "We've had several years of a really brisk market with limited inventory. I'm not so sure that people totally understand how to react to this type of market. It's a transition. It's going to take a little bit of time for people to be able to make those choices that they now have."

Indicators of market distress are moving in different directions, DataQuick said. Financing with adjustable rate mortgages is declining significantly. Foreclosure activity is rising but is still within the normal range. Down payment sizes are stable and flipping rates and non-owner occupied buying activity is down.

http://www.venturacountystar.com/news/2007/apr/13/housing-market-continues-to-slide-across/

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