DataQuick’s May stats for our desert pals, Phoenix and Vegas, show these once-sizzling/then-chilled Southwestern markets enjoying modest sales upticks, just like O.C. is seeing. Sort of a springtime spring. Homebuying in all three places was at levels last seen back in August.
Here’s median selling prices and closed sales totals for May, and how they compare to last year and and the pricing peak …
| May | Price | Vs. ‘07 | Vs. peak | Sales | Vs. ‘07 |
|---|---|---|---|---|---|
| Phoenix | $210,000 | -16.0% | -20.5% | 7,510 | -25.7% |
| Vegas | $239,940 | -17.3% | -23.1% | 3,680 | -18.0% |
| O.C. | $485,000 | -23.6% | -25.0% | 2,266 | -15.3% |
DQ’s thoughts on the desert …
• On Phoenix: “Sales rose to the highest level since the credit crunch hit last August, though it was still the weakest May sales total in 13 years. Price reductions continued to boost demand, with the median sale price dropping to the lowest point since March 2005.”
• On Vegas: “Median sale price dropped to its lowest level in four years as foreclosures continued to weigh heavily on the housing market. The allure of discounted properties helped push sales up to the highest point since last August, though it was still the slowest May for total sales in a decade.”
Other real estate news …
- Gov. Arnold says Calif. will ‘grow out’ of housing ills by ‘09
- Slump pinches local ultra-luxury housing
- Realtors put O.C. home supply at 2-year low
- BBQ grill shop to close due to housing woes
- Harvard study calls downturn ‘worst in a generation’
- Gas prices helping O.C. landlords
- Rents seen falling 3.1% at big O.C. complexes
- Big Orange property index takes worst hit in 13 years
Peak selling season, and the numbers can’t even beat last years peak selling season. Wow, that can’t be good. 2007 was terrible!
It seems people are trying to find light anywhere they can, even if it means getting down on their hands and knees to peek under the door. Blackbox is right on pointing out that if we can’t beat last years numbers we are still in a declining market. Look out below!
where are the other pov?
I have a friend that works for Wachovia and as he states “this is the tip of the iceberg”. He is looking at buying a house in 1-2 years and he is on the front lines. I trust this guy more than “in the bag” Watts or these other “experts”.
“I trust this guy more than “in the bag” Watts or these other “experts”.”
but wait, Steve Thomas says that this is a great time to be a buyer. Don’t you believe Steve? He is a realtor, he would never lie to you, would he?
I did actually know of a couple in their late 50’s - early 60’s that were foolish enough to buy recently and they are on the verge of losing their new home and commuting from West Elsinore!!!
It seems there’s always a fool knife catcher here and there.
If its going to crash,
I want to get it over with, now. I call it instant rapification.
rants, et.al,
when you can buy a property and renting it covers your costs, you shouldn’t be weary about price chances, since the amount of money you’ll chew away at a amort. mortgage, plus tax bene’s, will keep you above water. after all, when a plant finally sprouts, its been growing out of site for a while, right? These are simple investment decisions for folks and if the numbers work, jump in. enjoying my knife catching….weeeeee.
I know lots of folks who are gobbling up stuff. I’m on #3 now, each cash flow positive.
Remember - “Jon - there ain’t no bubble - Lasner” has the forum here! He is quoting his expert sources and tells us all - Like Karnak the Magnificient! In his case, it would be “Jon the Idiot”!
Low end definitely is looking good. But I still don’t see stuff for less than rents at 7% (mortgage and taxes). Here and there, maybe. High end has a long way to go.
what a shock Observant RE…rants and Bubbs etal do not want ANY home purchases, but they care about the overall health of the economy. They spread a doom and gloom attitude, if, had you listened, you would have missed out on the opportunities you have decided are right for you, not everyone, just you.
They solely look at buying at the absolute cheapest possible point…forgetting all the while, that more people have money around here than they would like to believe. The investors looks long term at building a RE portfolio. If it cash flows for you, what could be better? All the while, someone else is paying down the mortgage. Beeeeeutiful.
The bulls are running scared (call us the Pamplona blog)!!
Now, even the bulls say they are bearish (at least until 2009).
Just remember, when EVERYONE is bearish, that will be the time to buy!!
Perfect…I am bearish.
Sincerely,
Mulli, shockg, sigh, thoughtful, alfalfa and any other handle i may have forgotten.
fast-growing Saudi imports from the U.S. include wheat, barley, oats, sorghum, corn and fish. Saudi’s growing demand for food and clean water depends on a continuous supply of oil revenues from its American trading partner…lets just simply multiply our cost to them by 6 or 7 and see waz up?
global depression is on the way. a mid east oil war will start. this war may spread. gas hits double digits a gallon. hyperinflation takes hold. better get some good real estate in a safe community. obama lovers, gw looks smart with the usa sitting on iraq oil fields.
“Just remember, when EVERYONE is bearish, that will be the time to buy!!”
This kind of thinking is plain out foolish. Never buy based on what others think. Do your own homework. Only you are responsible for your own doing and undoing. Understand risk.
You have to remember, all of the foreclosures we have seen so far have happened with high employment, low interest rates, low food and fuel costs.
Now, with unemployment skyrocketing upwards, inflation at unbearable levels and much higher interest rates coming, the 2008 buyers will become the equivalent that the 2005 buyers are now.
We have much more foreclosures ahead of us then we do behind us.
interesting. so we have to compare apples to oranges with the 9months data period in order to make the housing situation look better. Why not year over year comparison? And why not focus on price in the headline?
Observant_RE: so you purchased recently and are cash flow positive?
You don’t need to give me an exact address - but I am very curious as to what community you bought in and at what price and what kind of home?
I personally know of two recent deals that are actually cash flow positive - but they were bought by two friends who happen to have broker licenses and contacts with the banks holding the paper which they leveraged to get deals that never were placed on the MLS. The deals were very discounted. Back door deals are not that easy to come by. We have been given an offer for such a deal but we’d have to buy multiple to get that ddeal - basically cutting deals on portfolios and not single homes.
Another way of stating this: Find me a property today on the MLS that if sold at the list price would be able to be cash flow positive with, say 10% down. Then try 20% down. I am very curious if anyone bullish actually does the work to prove the point here on this blog.
And make sure you are realistic with rents - that is one area I have plenty of data for $/sqft/month in just about every zip in south and coastal OC.
Isn’t May always an 8-9 month high in sales? Let see…9 months prior to May would have been….August. Hmmm….I am betting that in just about every year…May pipped August sales. So where is the news here? The answer is nowhere. It sounds good…but in reality it means nothing.
Compare May 08 to May 07……
“when you can buy a property and renting it covers your costs, you shouldn’t be weary about price chances, since the amount of money you’ll chew away at a amort. mortgage, plus tax bene’s, will keep you above water. after all, when a plant finally sprouts, its been growing out of site for a while, right? These are simple investment decisions for folks and if the numbers work, jump in. enjoying my knife catching….weeeeee.”
We all think you are full of crap. How about some numbers. What did you buy for. What is the monthly rent. Insurance. Taxes. What were the loan terms. What was your DP. Did you factor in the opp cost of the DP.
Even REO sales are still at numbers that do not work out from an investment perspective unless you make fantasy assumptions about appreciation returning. With interest rates where they are now, you should pay no more than 120-150 times rent. The only place I have hear of that you can find those sorts of prices are in the midwest.
That means a house that rents for $2000 per month should only be purchased for $240K-$300K. Are you saying you bought that cheap relative to rent? If you did not…you can’t do the math which you seem to think is so easy.
not buying it is correct.
The only way thus far to get a real deal is to know someone, and have a few Million cash that will allow you to help a bank or servicer knock half a dozen properties off the books at once. Then you can buy cheap.
But watch…in 2011-2013…and Joe Schmoe will be able to find a cash flow positive deal….if he has CASH. There are MUCH better profits to be had elsewhere right now…like shorting the stock market….woo hoo
also keep in mind that rents will most likely go down in the years to come….
“interesting. so we have to compare apples to oranges with the 9months data period in order to make the housing situation look better. Why not year over year comparison? And why not focus on price in the headline?”
then the headlines and story won’t look so good. unfortunately, most folks can’t handle the truth when it’s bad. they want to feel warm and fuzzy inside even though they will hurt in the long run.
Comparing sales since the year starting September? Alrighty then.