MB vs. CA & U.S. Trends

No doubt there's a little buzz growing – well, someone's always trying to grow it – to the effect that the local housing market is on the road to recovery.

A couple sources of that talk are a recent data release by the California Association of Realtors (click here for the CAR press release) and an uptick in the Case-Shiller home price index (click here for the Case-Shiller news page). Among the happy highlights:

• Statewide, the number of homes sold (closed) rose 20.1% in June 2009, compared to June 2008 (CAR);

• The Case-Shiller index, a barometer of home prices tied to same-house sales, rose 0.5% in May over April;
  

• A press release accompanying the Case-Shiller data says, amid various qualifications, that the figures represent "the first time we have seen broad increases in home prices in 34 months. This could be an indication that home price declines are finally stabilizing."

• The CAR press release gives MB an honorable mention as the second-highest-value market in the state. Only Beverly Hills 90210 ranked higher than MB's SFR median of $1.475m for June 2009. (Not all markets are on the list, and MB hasn't been for about a year, having failed to hit the threshold of 30 sales per month. But for now, MB is back in the mix.); and
  

• The number of sales locally (SFRs in all of MB) increased from May to June, from 20 to 29.
  

On the other hand...

• Sales across California in June were actually slower than in May by 6%, according to CAR, suggesting a slowdown as we enter Summer, despite increased chatter about the market warming up;

• Median prices statewide were down 26.4% year-over-year, down 23.5% in LA County, and down 15.7% for the beach cities of MB, HB, Redondo, El Segundo and Playa Del Rey (see Daily Breeze chart);

• MB's median price for June was down a whopping 25.7% year-over-year – as seen in the same CAR press release. Though we don't usually react much to one month's data with a small sample size, that figure is actually pretty consistent with MBC's finding earlier this month that the median for SFRs (west of Sepulveda only) for the full first 6 months of 2009 was down 22.4% against the first 6 months of 2008 (see "Pace Slower, Prices Lower");

• Those Case-Shiller data show the end of a downtrend nationally, but for the LA area, declines continued (-0.1% for May, compared to the positive 0.5% nationwide);

• Prices in the LA area were down 19.8% year-over-year, worse than the 16.8% decline for Case-Shiller's 10-market index, and 17.1% for their 20-market index (note that this number is calculated much differently than median prices); and

• MLS-recorded sales of SFRs in all of MB in June 2009 were flat with 2007 & 2008 at 29 (there were 29 last year and 30 in 2007), well below recent years, which ranged from 38-59 (see Kaye Thomas' post on month-by-month sales in this decade).

• The sales pace west of Sepulveda remains below 2008's record-setting low, 76 SFR closings in the first half of this year versus 89 last year, and last year was the slowest on record for 20+ years.

There's something for everyone in the data. They clearly don't point in just one direction.

The CAR press release, which generated news before the Case-Shiller figures came out, doesn't speculate much on prices. It does note, as a hopeful sign, that "many distressed properties are receiving multiple bids" (i.e., underpriced REOs drawing several buyers) and that "year-to-year price declines are diminishing."

So what might be on the horizon? CAR predicts an increase in supply at the lowest end of the market from "another surge of foreclosures" later this year, yet also expresses the hope that median prices won't be much affected. Maybe not.