Southern California Home Sales: Luxury Home Prices Fall Nationwide

Southern California Home Sales – “The luxury market was the first to recover from the housing downturn, and now it’s a bellwether of slowing price growth for the rest of the market. Sales at the top end of the market continue to soar, but prices are downshifting …”

Southern California Home Sales:
Luxury Home Prices Fall Nationwide

Southern California Home Sales

According to Redfin, Los Angeles is among the hardest hit areas in terms of the decline in prices of Luxury Home Sales, dropping 10% from 2014 levels.

Southern California Home Sales Are Among Most Drastically Effected

This week we’ve been taking a look at California home sales in 2015 and 2016. We’ve been highlighting how Southern California home sales have performed this year and what to expect from the California real estate market in the coming year. In general, we’re looking at a housing market that is growing in sales and value, but at a slower rate than before. In short, we appear to be experiencing a “rest” in the market. All in all, that’s a good thing.

There is one section of the California Homes for Sale market, however, that is not performing like the rest. Prices of Luxury homes fell during the 2nd half of 2015 for the first time since 2012. Over at Redfin, they have been analyzing this and have come up with some very interesting numbers. As you can see from the chart above, Los Angeles is among the hardest hit areas as far as falling prices of luxury homes.

There are several causes for this, and one is the slowdown of activity from foreign investors. Here in the San Gabriel Valley we’ve noticed a distinct pull-back of activity since the fall of the Chinese stock market and the crackdown of the Chinese government on money being invested overseas. With that slowdown, prices began to pull back in an effort to attract buyers.

Check out this detailed article by Alina Ptaszynski over at Redfin. We’ll conclude our analysis after the jump.

Luxury Home Prices Fell This Summer for the First Time Since 2012 | Redfin

Redfin Blog

“Home prices in the luxury market fell 2.2 percent in the third quarter compared to last year, the first time prices for the nation’s most expensive homes have fallen since the first quarter of 2012. The luxury market, which we identify as the priciest 5 percent, was shown up by the bottom 95 percent, where prices grew 3.8 percent over the same period. The bottom 95 percent of the market has seen consistent price growth of around 4 percent in each of the past four quarters.”

Read More Here: https://www.redfin.com/blog/2015/12/home-prices-in-the-luxury-market-fell-this-summer-for-the-first-time-since-2012.html

Southern California Home Sales: Is Luxury Real Estate A Leading Indicator?

As I mentioned in earlier posts this week, there are a few … not many, but a few … analysts of the real estate market who are convinced that we are currently experiencing another “real estate bubble”, and that prices and activity are both about to fall. One of the things that they point to is the recent decline in prices in the area of Luxury homes. The upper end of the market has long been considered a “leading indicator” for the rest of the market. The top 5% market area was among the first to recover. Could this recent drop in prices among luxury homes signify a coming downturn in the rest of the market as well?

Personally, I don’t subscribe to the extremely pessimistic view of some. All markets adjust. No market simply moves upwards in a straight line. No market moves downwards in a straight line. Whichever way the market trend is going, there will be “retracements” and “market adjustments” along the way. What’s more important than these adjustments, is the trend itself. This market action among Luxury Homes is certainly a heavy adjustment, but it falls far short of signifying a trend reversal.

The Southern California Home Sales market … along with real estate in the rest of the nation … is on an upward trend. The fact is that Luxury Home prices had become very inflated and overblown by last June, and they have adjusted over the last few months. The rest of the market may be a bit overpriced, but not to that degree. Yes, we may see some adjustment in prices throughout the rest of the market over the next few months, but it’s not the bursting of a “bubble”. It’s not the reversal of the current trend. It’s the normal activity of a healthy market making needed adjustments, and after a brief pull-back the upward trend should continue.

Southern California Home Sales.

Real Estate Values: CAR Reports Values Down In September

Real Estate Values:
CAR Reports Values Down In Sept

Caliifornia Home ValuesRise In Prices Slows In September As Interest Rates Rise

The California Association of Realtors latest report on Home Values show that values in California Home Sales dropped in September to their lowest levels since February. However, they were still above September value levels for the same time period of last year.

Part of the drop in values could be traced to rising interest rates. However, it should be noted that this report was released in mid-October, and rates have fallen again siince that time.

September Home Sales & Price Report

September home sales and price report – California Association of

http://www.car.org Thu, 17 Oct 2013 17:03:52 GMT

LOS ANGELES (Oct. 17) – California home sales declined for the second straight month in September, following rising interest rates and economic uncertainty, which put the demand for housing on hold for buyers.

Rates Since Report May Signal Good Holiday Buying Season

As stated above, mortgage rates have fallen again since this report. In fact, today’s rate of aproximately 4.15% (30 year fixed) is lower than the 4.30% reported on Oct 1. This may signal two things: 1) An opportunity for buyers over the Holiday season; and, 2) a possible bottom to this value reversal we’ve seen over the last couple of months.

Southern California Home Prices Static But Sales Soar

Southern California Home Prices:
Prices Static But Sales Soar

Southern California Home Prices

Southern California Home Prices Were Flat In July… But Sales Went Through The Roof

In the month of July, Southern Californiia Home Prices were flat, showing a flattening of a steep upward trend. However, the number of sales in July in the region was 25,419 units (new and resale homes & condos combined). That’s 23.5% more than a year earlier and the strongest showing since July of 2005.

One of the reasons for this kind of action is the rising inventory. As Southern California home prices have risen, many “underwater” owners have found their situation changing to one where they’re at least able to “break even” if not make a profit on a sale. The rising number of homes available has led to more pricing competition which has slowed that steep rise of prices we’ve been seeing over the last months. Additionally, mortgage rates jumped a bit a couple of months ago. This also may have spurred some buyers to act before they go higher.

Here’s an article from Andrew Khouri in the Los Angeles Times that provides all the facts and figures:

Southern California Home Prices Static But Sales Soar

While the price increases took a slight breather over the month, sales soared. Buyers purchased 25,419 new and resale houses and condos in July, 23.5% more than a year earlier and the strongest July since 2005. Sales were up 17.6% from June, when sales fell.”
http://www.latimes.com/business/money/la-fi-mo-home-prices-20130814,0,2245562.story

  Southern California Home Prices and Sales Action Good News For The Market

Many economists and market analysts have been speculating as to whether or not Southern California home prices and sales were signalling a return to the “bubble” conditions of the last decade. The good news is the current flattening of prices and increase in sales is a “technical” indicator that the market is healthy and not in danger of becoming another dangerous bubble. The rising home price rate has been very steep and is in need of a flattening or even a slight “pullback”, and a balance point between prices and sales numbers is actually a good sign for all concerned.

Southern California Home Prices.

California Home Sales: Median Price Sees Largest Jump In 33 Years

California Home Sales:
Median Price Sees Largest Jump In 33 Years

California Home Sales | Costa Real Estate Digest

In May 2013, homes costing $500,000 or more accounted for 35.4 percent of sales in California, up from 24.6 percent a year ago. (Keith Birmingham/LA Daily News)

At Least 34.5% Of California Home Sales In May
Were $500K And Up

More good numbers in California home sales in May were just reported. The California Association of Realtors reports that the state's median home price increased to $417,350 from $316,460 in May 2012. This is an increase of 34.5% over may of last year, and that's the largest year-over-year jump since February of 1980. Additionally, the percentage of sales over $500K increased.

Here's a Video from the National Association of Realtors with some good numbers from a couple of weeks ago:


More currently still, here's an article from Gregory J. Wilcox in the Los Angeles Daily News with those numbers and a lot more:

California median housing price increases by most in 33 years

"The median price of a previously owned house in California soared 31.9 percent in May, the largest year-over-year increase in more than three decades as sales of more expensive properties increased and inventory remained tight …"
http://www.dailynews.com/news/ci_23480624/california-median-housing-price-increases-by-most-33


Other Factors Also Support California Home Sales

There are other good things going on in the California Home Sales market as well. The market numbers are currently being supported by fewer REO sales and continuing low interest rates. Good news in the coming months can be supported by the fact that Buyers are using more conventional financing strategies and are also investing higher down payments than they have previously.

California Home Sales.
 

California Home Sales: Foreclosed Home Sales Decline In California

California Home Sales:
Foreclosures Decline Again

California Home Sales | Costa Real Estate Digest

California Home Sales Numbers Show Foreclosures Down While Prices Climb Again

RealtyTrac shows more good numbers for the California home sales market. The first quarter of 2013 shows that foreclosed properties made up 30% of the market, down from 40% a year ago.

Here's an article from "The Westside Story" that will fill you in on the numbers:

Foreclosed Home Sales Decline in California

"The number of foreclosed home sales in the state of California went down while the median sales price increased. The news came from Realty Trac, a real estate tracking service. The firm said 30 percent of California sales in the first quarter of 2013 …The Westside Story"
http://www.thewestsidestory.net/2013/05/31/foreclosed-home-sales-decline-in-california/

Rising Prices In California Home Sales Market Help Some Avoid Foreclosure

Some homeowners who were looking at foreclosure have been assisted out of their situation by rising prices. They were either able to re-finance or sell their homes because they now had equity as the price floor rose beneath them. There are stiill a lot of foreclosures in the California home sales market. In fact, the state is still #3 of the states with the highest percentage, but the numbers are moving in the right direction.

California Home Sales.

Real Estate Values – Is Housing in Bubble Trouble?

Real Estate Values:
Is Housing In Bubble Trouble?

Real Estate Values | Brion Costa

Some Analysts Believe The Recent And Swift Rise In Real Estate Values May Foreshadow Another Market "Bubble"

As anyone who reads these pages is aware, real estate values have been climbing quickly nationwide. After the "big dump" of a few years ago, the market bottomed, played around at those bottom levels for a while, and then began to climb as the economy started to improve and consumer confidence began to grow. With so many REO properties on the market at low prices, the Investor market became a driving force in the recovery of real estate values.

Some analysts now believe that we are seeing signs of another "bubble" in the market. This would not be good news for the future. While most are seeing a market in need of a "correction", the "bubble-seers" are more pessimistic. The correction they see coming is much more extreme, with real estate values again plummeting sharply. Are they correct?

Here's an article by Pat Mertz Esswein from "Kiplinger's Personal Finance". In it, Pat interviews Mark Vitner, Managing Director and Senior Economist at Wells Fargo:

Is Housing in Bubble Trouble?

"Follow @PatEsswein. Andy McMillan/Redux. Wells Fargo's Mark Vitner. Mark Vitner is a managing director and senior economist for Wells Fargo. He tracks trends in inflation and the U.S. housing markets, commercial real estate and regional economies.Kiplinger Personal Finance"
http://www.kiplinger.com/article/real-estate/T038-C000-S002-is-housing-in-bubble-trouble.html

Real Estate Values Put Sellers In The Driver's Seat

With Investors pushing the market upwards, and the current lack of inventory, the future is unclear. It's difficult to tell right now who is correct as far as the future of real estate values … those who see a coming "correction", or those who fear we are headed for "bubble trouble". One thing is clear, however, and that is that currently it is a good time to sell. Whatever way you look at it, real estate values are up, homes are selling, inventory is not growing, and we're just moving in to what is traditionally called the "Selling Season".

If you're currently dickering about whether or not it's a good time to sell your home … it is. And, if you're looking for professional and aggressive assistance, why not give me a call? I can help you sell any type of home in any area of Southern California, and I'd be happy to provide you with all the facts and figures concerning your particular situation. So if you have the need, please don't be shy. Call me at the number on this website, and I'll be glad to help.

Real Estate Values.

 
 

California Home Sales – CoreLogic Home Price Index Rises by 10.5 Percent

California Home Sales:
Califonia Among Leaders In Continuing Increase In Home Values

California Home Sales | BrionCosta.com

California Home Sales Prices Rise 17.2%
Year Over Year In March

The rise in California home sales prices continues. CoreLogic is reporting that nationwide the home price index rose 10.5% in March from the level it held in March of last year. Nevada let that rise at 22.2%, while California home sales put the state in 2nd place at 17.2%. Arizona, Idaho, and Oregon completed the top 5 in that order.

The rise in prices nationwide and in California home sales is being driven by rising demand among both home buyers and investors, combined with a lack of inventory.

Here's the press release from CoreLogic published in the Sacramento Bee: 

CoreLogic Home Price Index Rises by 10.5 Percent Year Over Year in March

"IRVINE, Calif., May 7, 2013 –Including distressed sales, the five states with the highest home price appreciation were:  Nevada (+22.2 percent), California (+17.2 percent), Arizona (+16.8 percent), Idaho (+14.5 percent) and Oregon (+14.3 percent)…"
http://www.sacbee.com/2013/05/07/5400438/corelogic-home-price-index-rises.html

 

"Selling Season" Supports Short Term Continuation
Of Upward Movement In California Home Sales Prices

With a rise in prices as steep as we've seen, both nationally and in California home sales figures as well, some analysts feel the market may be overblown and due for a correction. However, it's being buoyed increasing demand, lack of inventory … and now one more seasonal influence. We are moving into what is known as "selling season". The summer months are traditionally a much more active time in the residential real estate market. Children are out of school and besides, no one wants to move in the winter when there may be snow on the ground. So, here we are in a market that is just approaching what is usually the "best" time of the year. The "selling season" influence is poised to combine with the other factors supporting the market and will probably keep California home sales prices rising through the summer.

California Home Sales.
 

California Home Sales – Home Prices See Largest Annual Growth In 7 Years

California Home Sales:
Home Prices See Largest Annual Growth
In 7 Years

California Home Sales Inventory
Less Than 3 Month Supply In March

The California home sales market is seeing prices rise and inventory drop. The Standard & Poor's/Case-Shiller index shows that home prices in the USA's 20 largest cities were up 9.3% over this same time last year. There is worry, however, that the report should be taken "with a grain of salt". Since we're talking about the 20 largest cities, there's a feeling that the report may be skewed by including most of the countries quickest rebounding markets. The Southwest includes many of these locations, and real estate is rebounding quicker here than in other parts of the nation. California home sales are among those leading the pack.

Here's an article from ABCNews 10 in Sacramento that explains it all.

Home prices reach biggest annual growth rate in 7 years

"Nationwide, there was a 4.7-month supply of homes for sale in March, meaning they would all sell in that time frame if sales continued at March's pace and no supply was added. Typically, a six-month supply is considered balanced. California markets have even tighter supplies of homes for sale, dropping below 3 months in March, the California Association of Realtors says. …News10.net"
http://www.news10.net/news/california/article/243484/430/Home-prices-reach-biggest-annual-growth-rate-in-7-years

California Home Sales Prices Squeezed Upwards By Lack Of Inventory

The California home sales market is being squeezed by low inventory. Competition is high among buyers and the lack of new REO offerings contributes as well. Prices in many areas have risen quickly enough to cause worry among many analysts. The worry is not that we're experiencing another "bubble" … we're far from that. The worry is that some areas are overblown enough to warrant a pull-back in sales prices as a correction in a long-term upward trend. California home sales are a perfect example of that, and we may be looking at a bit of a correction here in the next couple of months.

California Home Sales.
 

Real Estate Values: Low Mortgage Rates Making US Homes More Affordable

Real Estate Values:
Low Mortgage Rates Making US Homes More Affordable

Real Estate Values - Brion Costa

Real Estate Values & Mortgage Interest Rates Engaged In A Balancing Act

In these pages we have been reporting for a while now on rising real estate values here in California and around the country. The affordability of homes is still good because low interest rates on mortgages are offsetting the rising cost of housing.

However, many analysts are now seeing a crunch coming with any rise in interest rates from their current levels. The problem is that incomes are not rising along with real estate values. Incomes are remaining stagnant. That means that even if current interest rates remain the same, homes will become more un-affordable as prices rise out of the range of most buyer's income. Should interest rates begin to rise the problem will be even more serious.

Here's an article from PropertyWire with all the details:

Low mortgage payment rates making US homes more affordable, new research …

"At the end of the fourth quarter of 2012, with mortgage rates in the 3 to 4% range, US home owners paid 12.6% of their monthly income on mortgage payments, down 36.9% from historic, pre bubble norms." …Property Wire"
http://www.propertywire.com/news/north-america/us-housing-market-rates-201304107654.html

Real Estate Values May Be Looking At A Correction Of Some Kind

The upshot of the article is that in all probability real estate values will have to level off and remain stagnant while incomes catch up. In some areas, where the rise in prices has been the steepest, values may even have to retreat some to adjust. Markets need to stay in "balance". The balancing act between real estate values, mortgage rates, and the incomes of home buyers is a delicate one, and it's reaching a tipping point. Look for prices to level off soon and possibly to pull back from current levels as the market waits for incomes to catch up.

Real Estate Values.

Real Estate News – Featured Posts – 04-06-2013

Real Estate News:
Ruby Brings You Today’s Posts

Real Estate News:
Here Are Ruby’s Featured Posts For Today (4/6/13)

Hi there. Ruby here. I’m Brion Costa’s cyber assistant, and I’m here to guide you through the Costa Real Estate Digest so you can find the best information about real estate in one simple location. Whether you’re a prospective buyer or seller, an investor in commercial or residential properties, or just someone who likes to keep up on the Southern California Real Estate market, you’ll find all the information you need right here at BrionCosta.com.

Real Estate News: Home ValuesToday I have two great posts to bring to your attention. The first is titled: “Home Values: Prices Show Biggest Jump In February In 7 Years”. In this post you’ll find a report from Inman News about home values nationwide. Home values increased in February by a very large jump over the same month last year. A report from CoreLogic provides the details, and you can read all about it by clicking here:

>>> Home Values: Prices Show Biggest Jump In February In 7 Years

Real Estate News: Southern California Home SalesThe second article I want to point out today is called: “Southern California Home Sales: Market Shows Strongest February In 6 Years”. This article highlights a report from the Press-Enterprise about Southern California Home Sales numbers … also for February. As with the nationwide sales figures, prices are rising quickly in Southern California. Interestingly though, activity is falling in some areas. This is mostly due to low inventory, which is another component that is forcing prices upwards. You can read about that by clicking this link:

>>> Southern California Home Sales: Market Shows Strongest February In 6 Years

That’s it for now. Please, follow the links and read today’s articles. Leave us your comments and questions if you like … We love to get a conversation going. Subscribe to our RSS feed, and receive our posts as they happen! And remember, for the best information regarding the Southern California real estate market, join Brion Costa and myself here at BrionCosta.com regularly.

You’ll be glad you did!

Bye now!

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Be Sure To Join Ruby Often
As She Guides You To The Best Information And
Real Estate News On The Web!

Real Estate News.