Real Property Report - California, September 2016
California Year-to-Date Sales Down 3.7 Percent from 2015, September Median Prices Up 6.6 Percent Year-over-Year
The Fall Slide into Winter
Marks End of Summer Selling Season
CALIFORNIA, NOVEMBER 2, 2016 – California single-family home and condominium sales were 35,842 in September 2016, a decline of 10.4 percent from August and a decline of 6.7 percent from 38,397 in September 2015. Year-to-date sales (January through September 2016) totaled 318,757 properties, down 3.7 percent from the same period in 2015.
“The normal seasonal sales decline began in September so taking a longer term view gives a complete picture of the market,” said Madeline Schnapp Director of Economic Research for PropertyRadar. “Sales from January through September fell 3.7 percent compared to the same period in 2015, the lowest since 2011. Despite lower sales, prices continue to climb higher albeit at a slower pace than prior years.”
The median price of a California home was nearly unchanged at $434,500 from $435,000 in August but gained 6.6 percent from $407,500 a year ago. The median price of a condominium was $419,000, nearly unchanged from $420,000 in August 2016 but up 6.1 percent from $395,000 in September 2015.
Within the 26 largest counties in California, on a year-ago basis, prices were higher in all but three counties. The counties with the largest annual gains were Monterey (+18.1 percent), Marin (+14.1 percent), Sonoma (+10.5 percent), San Bernardino (+9.4 percent), Santa Barbara (+9.1 percent).
“The counties surrounding the San Francisco Bay, an hour away from San Francisco and Santa Clara, are showing some of the largest price movements,” said Schnapp. “Conversations with real estate agents in those surrounding areas indicate an increasing number of Bay Area workers, willing to brave long commutes, are seeking housing in these lower priced counties.”
“In yet another year plagued with lackluster sales and rising prices, the lack of inventory was a common theme up and down the state," said Schnapp. "Restrictive zoning laws, rising building costs and limited affordability are keeping a lid on supply. Fortunately, rising single-family permits and starts in many areas throughout the state promises to provide some relief in 2017.”
The number of homeowners in a negative equity position fell to approximately 450,000 in September 2016, a decline of nearly 115,000, or 20%, since September 2015.
“The silver lining in rising prices is it allows underwater homeowners to escape their negative equity prisons,” said Schnapp. “These newly freed homeowners can now refinance, taking advantage of near record low interest rates, or sell their home or buy another and become active participants in the housing market.”
Look for our Focus on Bay Area Real Estate report next week.
• Institutional Investor Purchases by LLC and LPs • Trustee Sale Purchases by LLC and LPs • Institutional Investor Sales by LLC and LPs • Foreclosure Notices. •In other California housing news:
- Cash Sales in September 2016 fell 11.4 percent from August and were down 7.3 percent from September 2015. Year-to-Date cash sales were down 7.4 percent compared to the same period last year. The decline in cash sales is mirroring the softness in the overall sales trends.
- Flip Sales in September 2016 was nearly unchanged for the month and down 9.7 percent over the past 12 months. In general, flip sales are lower this year than last due to the rapid disappearance of distressed properties and limited opportunity for a positive return on investment.
- Trustee Sale Purchases by LLC and LPs fell 22.4 percent for the month and were down 12.3 percent from a year ago. The outsized declines suggest that trustee sale data is incomplete for the month. Discounting the September data, trustee sale purchases have been trending mostly sideways since November 2013.
- Institutional Investor Purchases by LLC and LPs fell 8.1 percent from August 2016 but were up 5.0 percent from September 2015. Despite the year-over-year gain, investor purchases have trended mostly sideways since 2014.
- Institutional Investor Sales by LLC and LPs were nearly unchanged for the month but were down 19.2 percent from September 2015. Sales have been gradually trending lower since 2012. The gradual decline suggests the opportunity in holding properties outweighs the advantages of selling.
- Foreclosure Notices. Notices of Default (NODs) were down 15.4 percent from August 2016 and down 15.0 percent in the past 12 months. Notices of Trustee Sale (NTS) were down 11.4 percent for the month and down 11.1 from September 2015. Both NODs and NTS’ were likely impacted by September data delays.
- Foreclosure Sales were down 10.1 percent for the month and down 19.2 percent from September 2015. Foreclosure sales were also likely impacted by September data delays.
Home Sales - Single-family residence and condominium sales by month from 2007 to current divided into distressed and non-distressed sales. Distressed sales are the sum of short sales, where the home is sold for less than the amount owed, and REO sales, where banks resell homes that they took ownership of after foreclosure. All other sales are considered non-distressed.
Year-over-Year Home Sales
Year-over-Year Home Sales Year-over-Year Home Sales - Single-family residences and condominiums sold during the same month for the current year and prior years divided into distressed and non-distressed sales.
Year-to-Date Home Sales
Year-to-Date Home Sales – The sum of year-to-date sales of single-family residences and condominiums for the current year and prior years divided into distressed and non-distressed sales.
Median Sales Prices vs. Sales Volume
Median Sales Price vs. Sales Volume - Median sales price (left axis) of a California single family home versus sales volume (right axis), by month from 2012 to current. Median sales prices are divided into three categories: All single-family homes (black line), distressed properties (red line), and non-distressed properties (blue line). Monthly sales volumes (right axis) are illustrated as gray and lavender bars. The gray bars are distressed sales and the lavender bars are non-distressed sales.
California Homeowner Equity
California Home Owner Equity - A model estimate of California homeowners segregated into various categories of levels of homeowner equity for a given month. Homeowner numbers represent a percentage of total California homeowners.
Cash Sales - The blue bars (right axis) illustrate cash sales of single-family residences and condominiums by month. The red line (left axis) illustrates cash sales as a percentage of total sales by month.
Flipping – The number of single-family residences and condominiums resold within six months.
Market Purchases by LLCs and LPs
Market Purchases by LLCs and LPs - The blue bars (right axis) illustrate market purchases of single-family residences and condominiums by LLCs and LPs from 2007 to current. The red line graph (left axis) illustrates LLC and LP purchases as a percentage of total sales by month.
Market Sales by LLCs and LPs
Market Sales by LLCs and LPs - The blue bars (right axis) illustrate market sales by LLCs and LPs of single-family residences and condominiums by month. The red line graph (left axis) illustrates sales as a percentage of total sales by month.
Trustee Sale Purchases by LLCs and LPs
Trustee Sale Purchases by LLCs and LPs - The blue bars (right axis) illustrate trustee sale purchases (foreclosure sales) of single-family residences and condominiums by LLCs and LPs from 2007 to current. The red line graph (left axis) illustrates purchases as a percentage of total trustee sales by month.
Foreclosure Notices and Sales
Foreclosure Notices and Sales - Properties that have received foreclosure notices — Notice of Default (green) or Notice of Trustee Sale (blue) — or have been sold at a foreclosure auction (red) by month.
Foreclosure Inventory - Preforeclosure inventory estimates the number of properties that have had a Notice of Default filed against them but have not been Scheduled for Sale, by month. Scheduled for Sale inventory represents properties that have had a Notice of Trustee Sale filed but have not yet been sold or had the sale canceled, by month. Bank-Owned (REO) inventory means properties sold Back to the Bank at the trustee sale and the bank has not resold to another party, by month.
Real Property Report Methodology
California real estate data presented by PropertyRadar, including analysis, charts, and graphs, is based upon public county records and daily trustee sale (foreclosure auction) results. Items are reported as of the date the event occurred or was recorded with the California County. If a county has not reported complete data by the publication date, we may estimate the missing data, though only if the missing data is believed to be 10 percent or less.