Real Estate

January Home Sales Lowest For Month in 5 years

Home sales accross Souther California fell 7.4 percent last month to their lowest level for January in five years as the real estate market continued to cool.

Potential buyers morphing into fence sitters accounted for the dip in the market's off-season. Last month buyers scooped up 28,085 new and resale housed and condos in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. Sales plunged 30,6 per cent from 28,952 transactions in December, but a monthly decline at this time of year is typical, the company said.

December is one of the year's strongest months and January one of the weakest. Sales last month were the fewest in January since 2001, when there were 18,010. The low point for the month was 1992 with 10,994 sales and the high was in 1989, with 23,379.

We're past the frenzy, and it's kind of normalizing re-reaching a balance. Sales have now fallen for two consecutive months, but this does not signal a trend. It will take until March to get a sense of how the market concludes a long boom cycle.

While sales are following expectations, the median price is not January's median across the six county region rose an anual 13 percent to $ 469,000.00

However the rise was well below the year ago rate of increase. We actually thought it would be lower than that by now. It's just coming down slower than we anticipated. That's because demand continues to be strong. The DataQuick president notes that there are no troubling signs for the market n the horizon.

In Los Angeles County 6,761 propertis changed hands down an annual 11.4 percent. The median price, the point at which half the units cost more and half less, increased 17.6 percent to
$ 487,000.

In Ventura County, sales fell 21.3 percent to 731 transactions, and the median price increase 18,8 percent to $ 608,000.

Sales Up For New Homes

Strong demand and contiune low interest rates pushed new home sales across the state to their highest level in 20 years during 2005, with the best markets in Southern California.

Last year consumers bought 136,228 new homes up 4.4% from 130,480 in 2004.

Since the market start slowing down Builders are a bit more careful these days, that's acting as a hedge agains getting caught with an inventory overload that characterized the end of the 1980's market.

Los Angeles County had the state's third strongest market with 10,872 sales up 19.2%. The median price dipped 0.2% to $ 454,000.

These number include condo conversions and (that) activity increased sharply last year. Since they are lower cost homes, they pull down the median price.

Home Affordability in 2005

Affordability Still At A Record Low

Housing affordability remain at 14% in December matching its record low label as rising prices and interest rates continued to slow the market.

In December the median price for a home in the state soared 15.6% to $ 548,430.00 and sales plunged 17.6%

In Los Angeles County, where the median price home cost $ 552.760, affordability fell an annual 5 percentage points to 12%

The minimum household income needed to purchase a median price home in California in December was $134,200 based on an average mortgage interest rate of 6.33% and assuming a 20% downpayment.

This is the beginning of a slowdown in the market that's been anticipated. Prices are still going to go up, but below the 10% range, and the volume of sales will slow significantly.

Alberto Pacheco
818 481 9211
Calbre01200694
Keller Williams Porter Ranch
www.granadahills.kwrealty.com