Monday, April 25, 2005

CA Unsold Inventory Index Doubles

The California Association of Realtors has a report out that contains some surprises. "C.A.R. President Jim Hamilton: 'The inventory of homes for sale has increased compared to a year ago, which has lessened the upward pressure on home prices, but consumers’ perceptions that interest rates will increase continues to drive the market.'"

So while the fear of missing out pushes prices higher, the fundamentals continue to erode. "C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in March 2005 was 2.7 months, compared with 1.3 months (revised) for the same period a year ago."

Unless everybody got a raise, affordability gets lower and lower. "The median price of an existing, single-family detached home in California during March 2005 was $495,400, a 15.7 percent increase over the revised $428,060 median for March 2004, and increased 5.2 percent compared with February’s revised $470,920 median price."

Check out the tables at the bottom of the page, especially the Santa Barbera areas, which showed a 22-38% drop off in sales.


At 11:00 AM, Blogger John Law said...

is this like in stocks where the volume dries up but prices still go up for a little while?

At 11:02 AM, Anonymous Anonymous said...

yeah... it is like a market top. If we had more data, one could perform technical analysis on the housing market. The lower volumes makes this an unsupported move upward.

At 12:00 PM, Anonymous Jim in Venice said...

Regardless of the drop in prices, I can't imagine paying that much for a house in the central valley or high desert. You'd sooner convince me to move to, say, Guatemala in search of cheaper real estate.

At 12:41 PM, Blogger Sunny said...

Hey jim in venice, Central America is nice! Its where all the dollars are flowing after the pop here. Its already happening.

At 1:11 PM, Anonymous Anonymous said...

I wonder how much of that 15% increase was after June 2004? I bet not much at all.

At 1:22 PM, Blogger John Law said...

(Hey jim in venice, Central America is nice! Its where all the dollars are flowing after the pop here. Its already happening.)

watch out, you don't know what's real growth and whats spilling over from the US credit bubble.

At 1:42 PM, Anonymous Anonymous said...

The dinner conversation with friends this weekend in San Diego, was how all of us know sellers that have had to markedly lower their asking prices these past several weeks. The number of open houses here this weekend were staggering!

I just don't understand how people can rationalize spending more money than they can afford on shitty little condos/houses.

Two families on my block were moving this weekend, out of state, (they're renters) because of the cost of housing.

How much longer can this madness continue (the million dollar question)?

At 1:46 PM, Anonymous Paul said...

In Orange County, CA, detached home prices are going up much more slowly than condo prices. We can see that, because the C.A.R. home price data doesn't include condos, whereas DataQuick's does. Usually, detached home prices are the first to fall, but they haven't even begun falling, except in the priciest areas, such as Newport Beach. Condo prices are still on fire in O.C. I would expect that the O.C. condo market has at least another good year left ahead of it.

- - - - -

C.A.R. lists the median home price in O.C. as $667,200, and the year-over-year price change as 10.2%.

- - - - -

DataQuick gives a median home price of $565,000, and a year-over-year price change of 16.5%.

"Pushed by surging buyer demand, the median price of an Orange County home galloped to a record $565,000 in March, DataQuick Information Systems said Thursday.

That selling price is up 16.5 percent in a year – a dizzying $80,000 more than in March 2004."

At 1:47 PM, Blogger Ben Jones said...

Thanks San Diego,
Please keep us updated.

At 1:54 PM, Anonymous Paul said...

For those who don't know, Newport Beach is one of the highest priced cities in Orange County, which is one of the highest priced counties in the nation. Newport Beach detached-home prices have been falling since last June, condo sale prices have been completely flat, and sales volume for both has dried up.

Prices are still rising in many other areas of O.C., although sales volumes seem to be down across the board.

At 3:02 PM, Anonymous Anonymous said...

goto and read j.grantham's latest quarterly piece. most of it is devoted to the housing bubble, specifically in australia, london, and US.

certainly a worrisome sign if a 85bil money manager is keeping this a close watch.


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