Truckee, Calif. CA – August 2013 California single-family home (SFR) and condominium (CND) sales (distressed and non-distressed) fell 1.8 percent from July but were up 1.5 percent in the past 12 months (y-o-y). A 7.3 percent pull-back in non-distressed property sales drove the decrease in August sales. In addition, August median home prices fell 1.4 percent to $360,000 from $365,000 in July.
“What caught my eye this month is both sales volume and prices fell simultaneously for the first time since January,” said Madeline Schnapp, Director of Economic Research for PropertyRadar. “The pop in borrowing costs beginning mid-June has definitely impacted market activity, reducing demand and pushing down prices.”
In a research report, PropertyRadar noted that:
· High numbers of underwater homeowners continue to exert a drag on the California real estate market recovery. In August, 2.0 million (29 percent) out of a total of 6.8 million homeowners with a mortgage were effectively underwater.
· Cash sales as a percent of total sales continue to decline. In August, cash sales represented 24.0 percent of total sales, down from 26.1 percent of total sales in July. Despite trending lower from the recent February 2013 peak of 33.0 percent of total sales, cash sales remain high and are an important part of the real estate marketplace.
· August 2013 investor purchases fell 13.4 percent from July. In general investor purchases have been trending lower since late last year. Rapid increases in home prices have reduced investor’s return on investment thus lowering investor demand.
· California foreclosure activity appears to have bottomed in May or June and is now trending sideways. The sideways trend reflects the ongoing recovery in the California real estate market.
“The recent interest rate hikes should result in price declines,” said Sean O’Toole, Founder and CEO of PropertyRadar. “Will prices correct to reflect the new rates,” asked O’Toole? “I doubt it. More likely we will see slower sales and more inventory.”
PropertyRadar (formerly known as ForeclosureRadar) is a web-based subscription service providing software, data and analytics for Real Estate professionals to solve real-world problems across all California properties. PropertyRadar includes all of the foreclosure data that professionals relied upon with ForeclosureRadar, including daily updates on auction status and outcomes. PropertyRadar has been serving its customers for over six years via ForeclosureRadar and and counts several thousand investors, Realtors®, government agencies and other professionals among its subscribers. Bloomberg, 60 Minutes, Wall Street Journal, Los Angeles Times, San Francisco Chronicle, the Associated Press and many other leading media outlets have cited ForeclosureRadar as an authoritative source. The company was launched in May 2007 by Sean O’Toole, who spent 15 years building and launching software companies before entering the professional real estate market in 2002 where he successfully bought and sold more than 150 residential and commercial foreclosures.