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SoCal: Weak Home Sales, Record Low New Home Sales

By Anonymous

A few key points:
? Total home sales were weak in January.
? New home sales were at a record low.
? A large percentage of buyers were investors paying cash at the low end.
? Foreclosure activity - as a percent of sales - was higher in January (we've seen an increase in many areas of the country).

Weak sales, with a high level of distressed sales, means lower prices - and we should see new post-bubble lows on the repeat sales home prices indexes soon.

Note: the Case-Shiller house price index that will be released next Tuesday is for the three months ending in December - and there will be further weakness in early 2011. Also January existing-home sales will be released next Wednesday and new home sales on Thursday.

From DataQuick:

Last month 14,458 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. That was down 26.0 percent from 19,528 in December, and down 5.9 percent from 15,361 in January 2010, according to DataQuick Information Systems of San Diego.
...
The total number of homes sold last month was the lowest for a January since 2008, when 9,983 sold, and the second-lowest since 1996. Last month?s sales fell 18.8 percent below the average January sales tally of 17,802.

January new-home sales were the lowest for any month in DataQuick?s records back to 1988. Builders have struggled to compete with prices on resale homes, especially distressed properties.

Absentee buyers ? mostly investors and some second-home purchasers ? bought a record 24.8 percent of the homes sold in January, paying a median $198,500. Over the last decade, absentee buyers purchased a monthly average of about 16 percent of all Southland homes. ... Buyers who appeared to have paid all cash ? meaning there was no indication that a corresponding purchase loan was recorded ? accounted for a near-record 29.5 percent of January sales ...

Foreclosure resales ? homes foreclosed on in the past year ? accounted for 37.0 percent of the resale market last month, up from 35.1 percent in December but down from 42.1 percent a year ago. Over the past year, foreclosure resales hit a low of 32.8 percent last June and have generally trended higher each month since then.

Full post as published by Calculated Risk on February 15, 2011 (boomark / email).