Real Property Report – California, February 2014

Truckee, Calif. (CA) – California single-family home and condominium sales fell 1.4 percent in February 2014 from January and declined 16.1 percent from February 2013.  Last month marked the lowest February sales since 2008.

“Rapid price increases and rising interest rates in concert with sluggish income and employment growth have slowed demand,” said Madeline Schnapp, Director of Economic Research for PropertyRadar. “Tougher borrowing standards, elevated prices, increasing borrowing costs and historically low inventory continue to exert a drag on market activity.”

Despite the decline in sales volume, the February 2014 median price of a California home rose 5,000 dollars, or 1.4 percent, to 350,000 dollars from 345,000 dollars in January. On a year-ago basis, median home prices have jumped 21.1 percent.

“The uptick in median home prices in February means little as seasonal factors continue to impact both sales and prices,” said Schnapp.  “Given the lackluster sales volume, however, median prices are unlikely to see the rapid gains that characterized the first half of 2013.”

The number of California homeowners with more than 10 percent equity in their homes increased 2.3 percent, or nearly 120,000, in February.

“The decline in negative equity is certainly good news,” said Schnapp.  “But, it is important to keep in mind that 1.2 million California homeowners, or 13.9 percent, remain underwater and will continue to create significant headwinds for the California housing market recovery.”

Institutional Investor LLC and LP purchases gained 1.6 percent for the month but are down 35.4 percent from February 2013.  Despite February’s modest gain, LLC and LP purchases were 50.1 percent below their December 2012 peak.

“For more than a year now, institutional investors have been gradually reducing their purchases of California real estate,” said Schnapp.   “Rising prices have reduced the return on investment, making homes less attractive as an investment option.”

“In sum, the California housing market continues to improve,” said Schnapp, “just more slowly than most analysts expected, given that we are in the fifth year of an economic recovery.”

About PropertyRadar®
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.

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