On Tuesday, Leslie Appleton Young, Chief Economist for the California Association of Realtors, spoke at our Realtor board breakfast regarding the California housing market, Los Angeles housing market and then the Palos Verdes housing market. Leslie mentioned that the public can access a variety of market metrics from so many different sources (Core Logic, Zillow, Trulia) but recommended that buyers and sellers recognize that real estate is local and Realtors assist our clients by researching the specific real estate area to make it more pertinent. Here are the highlights of her speech:
California market began its recovery 3 years ago and is now considered “recovered.”
We need minimum 3% increase in GDP for economic stabilization (currently around 1.8%) but unemployment is holding us back.
Housing sector currently the strongest sector in the economy. Silicon Valley is the strongest economic sector in the country.
Most rapid growth in educational services, leisure & hospitality, wholesale trade, construction and professional, scientific & technical services.
Mortgage rates are up 1% since May.
California home sales were down 3.2% for August 2012 due to lack of inventory of homes for sale. Median home price for August was $441,000, up 28% from August 2012 (due to less foreclosure sales). California real estate market currently off 27% from the 2007 peak but well recovered from the trough.
There are more equity sales compared to distressed property sales across the board. Currently, Los Angeles County real estate sales are 85% equity sales (property owners), 5% bank owned and 10% short sales which is a dramatic difference from 4 years ago when Core Logic identified 35% of sales as distressed (currently 15%).
In 2 to 3 years, California will have housing affordability issues. Household formation will rebound with job growth. First time home buyers have shrunk to 27%.
In California, foreclosure filings are down 55%, Notice of Default down 59% and REO (bank owned properties) down 61%. Currently in Rancho Palos Verdes, 16 homes are in preforeclosure, 23 are scheduled for auction and none are bank owned. In Palos Verdes Estates, 6 homes are in preforeclosure, 6 are scheduled for auction and 1 is bank owned. In Rolling Hills Estates, 10 homes are in preforeclosure, 2 are scheduled for auction and 1 is bank owned.
California Association of Realtors Marketing Survey indicated that demand for investment properties is robust; currently 25% of all sales with 19% investment rental and 6% as vacation/second home. Cash buyers dropped from a high of 30% in 2012 to 27% in 2013. International buyers have risen to 8% of all sales (from 5.8% in 2012) with 30% coming from China, 13% from Mexico, 9% from Canada and 6% from India.
Local Palos Verdes home sale information for the last 12 months follows. Additional local information can be accessed by clicking here or going to the “Statistics” tab above.
Rancho Palos Verdes home sales up 28%, median price up 13% to $1,065,000, and homes for sale (active listings) down 6%.
Palos Verdes Estates homes sales even, median price is up 83%, and homes for sale (active listings) up 15%.
Rolling Hills Estates homes sales up 56%, median price up 7%, and homes for sale (active listings) up 4%.
Charts courtesy of California Association of Realtors
