AUGUST 2009 HOUSING STATISTICS
During the summer months the Federal stimulus program have been driving home sales in the San Gabriel valley.  While housing prices remain below where they were a year ago, the trend continues upward.  August housing statistics issued by the California Association of Realtors show a sixth consecutive month-to-month increase in median home price in Los Angeles County.  The Los Angeles County median price was $292,960.  With the pending termination of the stimulus tax credit for first-time buyers, there has been a significant increase in demand from buyers and a limited supply of homes on the market.  This combination has helped fuel the increase in prices in our region.

The firming of the market in the valley area has continued as inventory has fallen.  It is common for well-priced properties to receive multiple offers after a short period of time on the market.  While over bidding hasn't reached the frenzy levels of 2005, we have seen homes sell for 10 to 15% above asking price.  There are questions on the future of our market after the stimulus program ends, assuming it will end.  There is an strong effort, lead by the National Association of Realtors, to extend the tax credit into 2010.  Without the credit, will buyers leave the market, will home prices drop and will the lack of inventory continue to drive prices upward?  At this point, no one knows how the market will react beginning in December.  

There remain worrisome signs on the horizon.  The foreclosure moratorium has slowed the quantity of lender-owned properties to the market.  If those properties are released to the market, that would cause downward pressure on prices.  The very large deficit spending by the Federal government and the monitization of that debt traditionally has lead to substantial inflation.  If home mortgage rates increase to 7.5 or 8.0%, that will cause downward pressure on prices while reducing the ability of many buyers to afford the higher-cost mortgages.  Current mortgage rates make this an excellent time to commit to a long-term fixed rate loan.

Keep in mind that as the volume of sales declines, the fluations in median price will increase.  Key San Gabriel Valley city median prices and the year-to-year percent increase in median value include:

Altadena   $480,000   -4.0%
Arcadia   $750,000   5.0%
Azusa   $256,750   -8.3%
Duarte   $288,000   -24.2%
La Canada/Flintridge   Insufficient Data
La Crescenta   Insufficient Data
Monrovia   $401,500   0.4%
Pasadena   $575,000   -1.7%
San Gabriel   $592,500   -1.3%
South Pasadena   Insufficient Data
Temple City   Insufficient Data

Source: California Association of Realtors and DataQuick Information Services

Months Inventory for Residential Housing in Pasadena



The above chart illustrates the dramitic change in inventory levels from late 2008 and early 2009 in Pasadena.  The change in inventory levels and current demand have combined to increase median sales prices over the past 6 months.

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Sharon and Rick Stever