DataQuick on SoCal: December Home Sales at Six-Year Low, Foreclosure Resales lowest since May 2007
Southern California home sales fell to a six-year low for the month of December as investor activity eased again and buyers struggled with a tight inventory of homes for sale. ... A total of 18,415 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was up 6.5 percent from 17,283 sales in November, and down 9.2 percent from 20,274 sales in December 2012, according to San Diego-based DataQuick.Both distress sales and investor buying is declining - and this is dragging down overall sales (plus inventory is still very low). However conventional sales are up about 25% year-over-year.
December’s sales gain from November is normal for the season, though it was weaker than usual. ... Last month’s sales were 24.1 percent below the average number of sales – 24,254 – in the month of December. Southland sales haven’t been above average for any particular month in more than seven years. December sales have ranged from a low of 13,240 in December 2007 to high of 36,865 in December 2003.
Foreclosure resales – homes foreclosed on in the prior 12 months – accounted for 5.8 percent of the Southland resale market in December. That was down from 6.3 percent the prior month and was down from 14.2 percent a year earlier. Last month’s foreclosure resale rate was the lowest since it was 5.4 percent in May 2007. In the current cycle, foreclosure resales hit a high of 56.7 percent in February 2009.
Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 13.2 percent of Southland resales last month. That was up slightly from 12.8 percent the prior month and down from 26.7 percent a year earlier.
Absentee buyers – mostly investors and some second-home purchasers – bought 26.2 percent of the Southland homes sold last month. That’s the lowest share for any month since it was 25.1 percent in November 2011. Last month’s absentee level was down from 26.6 percent the month before and down from 30.4 percent a year earlier. The absentee share has trended lower almost every month since hitting a record 32.4 percent in January 2013.
It is important to recognize that declining existing home sales is NOT a negative indicator for the housing recovery. The reason for the decline in overall existing home sales is fewer distressed sales and less investor buying. Those are positive trends!
Note: Also - the housing recovery (GDP and employment growth) is mostly new home sales, not existing home sales - so the focus for the "recovery" should be on new home sales and housing starts.