California home sales, median price up in June

MDA DataQuick's statewide housing-sales figures track the trend we saw earlier this week in Southern California: the median price is rising as the mix of houses sold shifts away from the cheapest properties.

The California median sales price in June was $246,000, up 7% from May, but down 25% from a year ago. A total of 44,000 homes was sold in June, up 13% from May and up 26% from a year ago.

As we've noted before, the rising median actually means prices are falling at the higher end of the housing market. That brings sales up, and raises the median because a greater share of homes sold are more expensive properties.

In June, for instance, the share of California houses sold that had been foreclosed dropped to 46%, the first time foreclosures were below 50% since August. As the market "normalizes" with foreclosures no longer dominating sales, we'll see higher median prices, but houses priced around and above the median will more likely be seeing ongoing price declines.

-- Peter Y. Hong

Comments

[Ace]

"In June, for instance, the share of California houses sold that had been foreclosed dropped to 46%, the first time foreclosures were below 50% since August. As the market "normalizes" with foreclosures no longer dominating sales'

Foreclosure sales have only dropped below 50 percent because banks are not foreclosing on anyone!!!!! Also, banks are doing more short sales which do not count as foreclosures.

The market is not going to 'normalize' anytime soon when 10 percent of mortgages in SoCal are now at least 90 days past due. Foreclosures and short sales will dominate the market for many years to come.

[LARealtyReport]

Foreclosures no longer dominating sales? only 46%? Maybe this quaifies as good news for the time being, but the moratorium is over in September, property taxes are due in November, and another wave of Alt-A/Option ARM mortgages are scheduled to reset for the next 3 years. It is highly unlikely that we will see any "normalizing" affect on the market in the near future.

[David]

The jump is primarily from more expensive homes on the market at short sale prices...not a very positive sign of a housing recovery. Here comes the second wave of foreclosures and every surfer knows waves come in sets of three. The big wave coming is commercial real estate.

[bulwark]

Where's the Department of Justice when you need them to enforce the antitrust laws? The banks are wilfully and knowingly restricting the supply of houses on the marketplace in order to keep prices inflated. That's an illegal agreement in restraint of trade.

[original thinker]

Peter Hong: "As the market "normalizes" with foreclosures no longer dominating sales, we'll see higher median prices, but houses priced around and above the median will more likely be seeing ongoing price declines."

NORMALIZES with foreclosures no longer
dominating sales ! That's low-end foreclosures
no longer dominating sales, mid-range and high end
foreclosures are just beginning their surge and will
soon be dominating sales. The Option and Alt-A recasts
set to hit between summer 2009 thru winter 2011 are
30% larger in total billions of dollars owed then the
Subprime loan collapses that washed over us the
last couple of years. On a graph, its the second
bigger wave of foreclosures just about to hit hard.
In fact, this month we are at the bottom of the lull
period in the very eye of the storm. The first 40%
of the problem triggered the Great Recession we are
in. The bigger second blow will catch us already in
greatly weakened economic condition. It will smash
the high and mid-range real estate markets. It will
trigger massive credit card default and extend and
increase unemployment for years.

As a final thought, let's remember that the average
U.S. worker lucky enough to find a new job is returning
to work with a 15% cut in pay.

Nothing is normalizing. It's lies and more lies, every
day. Don't forget we were 13 months into this
recession before the government even acknowledged
it existed.

Watch the skies! They're falling!

[SMRR]

Bottom!!!

[shockg]

Here comes the excuses and conspiracy theories.

[srla]

And given the record number of NODs in Q1 and Q2 of this year (it shot WAY up in Q1, then went even higher in Q2), we are guaranteed to see a flood of new foreclosures in the fall, as a given percentage of these NODs convert into foreclosures.

And then we have the upcoming waves of Alt-A and Option ARM recasts set to hit over the next two years that by all accounts should dwarf the subprime crisis.

So the data tell us we will be swimming in foreclosures locally for at least 2 years, even if by some miracle the unemployment rate stabilizes and improves. If it stays at 11.6% or goes even higher, all bets are off.

[TK Bruin]

Peter, you're out in left field on this one.

You must be aware of the next wave of foreclosures coming which is not expected to peak until middle of next year.

Tim in Sylmar

[Latesummer2009]

Unfortunatley, the next wave of foreclosures is headed right towards the Westside. Oh, but that will increase the median price and shows prices are increasing! NOT.. Just the opposite, the mid to high end will get whacked as sellers HAVE to drop prices in order to get a transaction.

www.westsideremeltdown.blogspot.com

[Nelcisco]

Here you go again SMRR calling BOTTOM, maybe I just don't understand what you mean. Is it that we need to hurry up and get there by dropping housing sooner and further?, or does it mean that we're there?

If you think we're there you need to elaborate and make your case. So far I see comments from others like srla who states that we'll be swimming in foreclosures locally from Alt-A and option A.R.M.s recasts for 2 yrs. even if unemployment stabilizes according to data. Original thinker suggests the same which I completely agree with because we can see it coming like an avalanche, however it seems that those are arguments
that leans toward why we're no where near bottom.

Can you explain your position in why you feel that way or where you get your data, maybe you something most of us don't!

[DF]

Those of you criticizing Peter should cut him some slack. He didn't write a puff piece claiming that prices are going up, he reported a fact--the CSI rose in LA--and then explained that all that really means is that price declines are beginning to affect properties at the high as well as the low end. This seems like a pretty responsible and accurate post to me, even though I agree with the other comments about the likelihood that housing distress will only worsen in the next couple of years.

[Laker]

Was looking at Zillow values for couple of properties I'm following:
All went up from 7-15%....
WTF? Is zillow confuzed or is there really an uptick in prices.
I'm talking about $650,000-800,000 houses in prime areas of SFV.

[Ace]

Laker,

You should have bought... it sounds like you are now priced out of the market forever! Enjoy a lifetime of renting! :)

Obviously that zillow estimate is useless. The properties did not increase in value.. I would guess that a few houses actually sold and since zillow does not count distressed sales, it pushed the values way up. Eventually zillow will count the distressed sales and the values will drop like a rock.