NEW YORK (MainStreet) — November isn’t exactly the busiest season for homebuyers, so it’s no surprise a benchmark index from the California Association of Realtors showed weak support last month.
But a closer look at the association’s figures and other fresh data on the California real estate scene shows a more positive message for Golden State homebuyers, home sellers and the U.S. housing economy as a whole.
Let’s go to the numbers.
For the month of November, the association’s Pending Home Sales Index dropped a surprisingly ample 14.4% for the month. Overall, pending home sales in the state were down 0.9% from November 2011. That’s hardly a devastating number for the regional real estate market, but since pending home sales — as the association describes them — are forward-looking indices, any decline could be a sign things may not going as smoothly for the U.S. housing market.
There is some good news once you dig deeper.
For example, the ratio of “non-distressed” home sales (in other words, purchases of short-sale homes or foreclosed homes) actually rose from October to November, from 63.4% to 64.9%. The Realtor group reports that’s the highest number of such sales since May 2008 — a good sign that “troubled” homes are rolling off the inventory lists and more traditional home sales are taking their place.
Consider this. Distressed property sales in California amounted to 49.8% of all home sales as of November 2011.Now that number stands at 35.1%, a remarkable, and helpful, drop in foreclosed homes on the marketplace.
An even deeper look inside the numbers reveals that California’s main population center — Southern California, encompassing Los Angeles, San Diego and their nearby suburbs — saw their strongest monthly sales since 2005 in November, according to Data Quick, a La Jolla-based real estate information provider.
According to DataQuick, the median home sale price in the sprawling Southern California region was up almost 17% from November 2011 to November 2012. Like CAR, DataQuick points to the decreased inventory of foreclosed (and usually cheaper) homes as a big reason home prices in the area have not only stabilized, but have climbed significantly.
One of the biggest homebuying demographics, the firms adds, is the “move up” buyer — a buyer that traditionally moves from a smaller, less expensive home to a larger, more expensive one.
That’s another good sign for the bellwether Southern California real estate market.
All told, the media price paid for a new home in the region was $321,000 last month, up from $275,000 in November 2011. Those are good, solid numbers for a housing market that desperately needs them.
“The government’s offered people an amazing gift in the form of extraordinarily low mortgage rates,” says John Walsh, president of DataQuick. “But that’s not the only thing fueling these sales gains. Investor activity and cash purchases remain unusually high, and more buyers feel confident about their jobs, the economy and the likelihood housing prices have bottomed and are likely to rise. We’re also seeing more non-distressed sales, where people sell at a profit and buy another house, triggering more move-up activity.”
As the calendar flips into 2013, the California housing market — an important one for the U.S, economy — is really showing signs of life.
All signs point to continued growth for the first half of next year, and that should bring the blood pressure down on home sellers, mortgage brokers and real estate agents not just in California, but in every corner of the U.S.