Florida and California See Home Sales Increase for More than a Year

ORLANDO, Fla. (Sept. 24, 2009) – Florida’s existing home sales rose in August – marking a full calendar year (12 months) that sales activity increased in the year-to-year comparison, according to the latest housing data released by Florida Realtors. Existing home sales rose 28% last month with a total of 13,850 homes sold statewide compared to 10,813 homes sold in August 2008 (see chart above). The state association also reported a 45% increase in last month’s statewide sales of existing condos compared to the previous year’s sales figure. Florida’s median sales price for existing homes last month was $147,400; a year ago, it was $188,500 for a 22 percent decrease.

Along with home sale increases, median home prices are also starting to gradually increase as Florida's real estate market recovers. During the first four months of 2009 (Jan.-Apr.), the median home price averaged $140,000, compared to an average price of $147,000 during the most recent four months (May-Aug.). With a full year of monthly increases in home sales, and with rising median home prices, can we now officially declare that the Florida real estate market is in full recovery mode?

LOS ANGELES (Sept. 25) – Home sales increased 9% in August in California compared with the same period a year ago, while the median price of an existing home declined 16.9%, the CALIFORNIA ASSOCIATION OF REALTORS (C.A.R.) reported (see chart above). Closed escrow sales of existing, single-family detached homes in California totaled 526,970 in August at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR associations statewide. Statewide home resale activity increased 9% from the revised 483,400 sales pace recorded in August 2008.

The median price of an existing, single-family detached home in California during August 2009 was $292,960, a 16.9% decrease from the revised $352,730 median for August 2008, C.A.R. reported (see chart above). The August 2009 median price rose 2.6% compared with July’s $285,480 median price.

“The statewide median price rose for the sixth consecutive month in August,” said C.A.R. Vice President and Chief Economist Leslie-Appleton-Young. “Recent price gains are consistent with the low inventory levels of the past few months. Levels of distressed properties remain high, but have declined compared with earlier in the year, and are one reason why inventory levels are running below the state’s long-run average of 7.2 months.

C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in August 2009 was 4.3 months, compared with 7 months for the same period a year ago (see chart above). The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.

In a separate report, DQNews reported that the August increase in California home sales was the 14th consecutive monthly sales increase on a year-over-year basis. Increasing home sales for 14 straight months, increasing median home prices for the last six months, and an unsold inventory index of almost 40% lower than a year ago - if those conditions do not reflect a true, solid real estate recovery in the California real estate market, how would a real recovery be any different?

Comments

[theblindtib...:]

The author asks "how could a real recovery be any different?"

I would suggest that perhaps in a real recovery you would not have not lost an average of 20% of the value of your home in the last 12 months?

Sep 28 03:21 PM

[concrete guy:]

Patience......that too will come. Now if we could just get back to normal lending and revive the dead move-up and jumbo markets, residential RE in both FL and CA would start to show real momentum. Add to that improvement in the unemployment numbers and I think you'll make your 20% back within the next few years. Here's hoping so.


On Sep 28 03:21 PM theblindtibetan wrote:

> The author asks "how could a real recovery be any different?"
>
> I would suggest that perhaps in a real recovery you would not have
> not lost an average of 20% of the value of your home in the last
> 12 months?

Sep 28 07:21 PM

[58robbo:]

could it be that banks have withdrawn inventory to such a degree as to be giving the consumer false supply/demand signals?
when in florida i'm somewhat of a regular at my county court foreclosure sales. on an average day they auction about 100 homes. the banks normally offload about 5 and keep the other 95(ie the reserve set was too high for the assembled buyers) in real estate limbo as most of them never seem to make it onto the mls/realtor.com etc.

could it be that with the onset of the recession, different demographics were affected at different times? what i mean is that at the start of the subprime debacle, lower income housing was perhaps first to go on the block followed by middle income homes and moving toward higher income as the recession progresses?

does anyone perhaps feel that these phenomena might be distorting the figures?

Sep 29 07:38 AM

[swalter:]

Mark - I've instructed you many times that you can't rely on data provided by realtors. When will you learn?

Sep 29 08:49 AM

[Russ Wetherill:]

Recovery? Recovery from what and to what? Certainly not to any state of normalcy or predictability in which a rational market participant could possibly make a sound decision.

Will the Federal Reserve continue to back-stop the failing MBS market? I don't know. Will the $8k buyer credit be extended, discontinued or increased? I don't know. Will the banks push out foreclosures and continue to sit on REO? I don't know. Will FHA continue to make loans with 95% LTV? I don't know. Will delinquency rates continue their exponential rate of increase? I don't know. Will the Fed and US Treasury pass this class? Gee, Mr. Spicoli, I don't know!

When answers to all of the above questions are known or even knowable, then it will be time to discuss whether recovery is possible much less present.

Sep 29 03:43 PM

[Hmm?!:]

Surely you jest??

I have to agree with some of the earlier comments:

>> Data from the realtor associations is NEVER going to tell you........ "stay away from the housing markets"!
>> banks are holding massive inventories, using Tarp money to bide their time. When banks sell the inventory, they have to take the loss.
>> At 20% and greater price declines homeowners in trouble can longer, refi or sell the house to pay off the mortgage.

We have a long ways to go yet.

Sep 29 10:43 PM