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Battered Southern California Home Market Notes One-Month Sales Surge
(LA JOLLA, CA) - The bottom of the real estate market may finally have arrived in Southern California where home appreciation rates were once the highest in the nation before the mortgage bubble burst.
John Walsh, president of San Diego-based DataQuick, reports Southern California home sales in September increased by an unprecedented 65 percent over the same month a year ago.
A total of 20,497 new and resale houses and condos closed escrow in the six-county Southland in September, up 5.8 percent from 19,366 in August and up 64.6 percent from 12,455 in September 2007.
Last month's sales were the highest for any month since December 2006 and the year-over-year gain was the highest for any month in DataQuick's statistics, which go back to 1988.
However, last month's sales were still the second-lowest for any September since 1996 and were 17 percent below the 20-year sales average for that month.
Walsh is waiting for October numbers to surface before calling September's performance the beginning of a turnaround.
"The pitifully low September 2007 sales numbers weren't tough to beat," he says. "More impressive was that this September's sales volume bucked the seasonal norm and rose above August.
"Steep price declines, especially inland, have improved housing affordability quite a bit and may keep sales levels well above the record lows we saw late last year and early this year." He adds, "It will depend on the severity of this economic downturn."
Walsh advises market watchers "to view last month's sales in the proper context. They represent escrow closings, which reflect purchase decisions made in mid-to-late summer.
"That was before the dramatic worsening of the nation's economic crisis in recent weeks. Over the next few weeks our sales data will begin to show how the meltdown in financial markets this fall has impacted housing demand."
Still, Walsh notes indicators of market distress "continue to move in different directions." He says foreclosure activity is at or near record levels, financing with adjustable-rate mortgages is near the all-time low, as is financing with multiple mortgages. Down payment sizes and flipping rates are stable and non-owner occupied buying activity appears flat but might be emerging."
John Walsh, president of San Diego-based DataQuick, reports Southern California home sales in September increased by an unprecedented 65 percent over the same month a year ago.
A total of 20,497 new and resale houses and condos closed escrow in the six-county Southland in September, up 5.8 percent from 19,366 in August and up 64.6 percent from 12,455 in September 2007.
Last month's sales were the highest for any month since December 2006 and the year-over-year gain was the highest for any month in DataQuick's statistics, which go back to 1988.
However, last month's sales were still the second-lowest for any September since 1996 and were 17 percent below the 20-year sales average for that month.
Walsh is waiting for October numbers to surface before calling September's performance the beginning of a turnaround.
"The pitifully low September 2007 sales numbers weren't tough to beat," he says. "More impressive was that this September's sales volume bucked the seasonal norm and rose above August.
"Steep price declines, especially inland, have improved housing affordability quite a bit and may keep sales levels well above the record lows we saw late last year and early this year." He adds, "It will depend on the severity of this economic downturn."
Walsh advises market watchers "to view last month's sales in the proper context. They represent escrow closings, which reflect purchase decisions made in mid-to-late summer.
"That was before the dramatic worsening of the nation's economic crisis in recent weeks. Over the next few weeks our sales data will begin to show how the meltdown in financial markets this fall has impacted housing demand."
Still, Walsh notes indicators of market distress "continue to move in different directions." He says foreclosure activity is at or near record levels, financing with adjustable-rate mortgages is near the all-time low, as is financing with multiple mortgages. Down payment sizes and flipping rates are stable and non-owner occupied buying activity appears flat but might be emerging."
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