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MARCH 2008 HOUSING STATISTICS

The March housing statistics issues by the California Association of Realtors continue to offer a sobering look at the housing market.  LA County's median home price declined 25.6% from March 2007 to $431,950.  The decline in sales volume was 37.6%.  The information provided by CAR reveals the significant impact of tight credit, increased short sales and foreclosurers, and high interest rates for jumbo loans.  Statewide, sales volume decreased 24.5% while the median price declined by 29.0%.

Our initial optimism for the Economic Stimulus Package has proved to be incorrect.  Prior to passage, a typical jumbo loan was priced about 1 1/4% above a conforming loan.  The temporary change in the conforming loan limit to $729,750 has created a "new" loan category -- Jumbo Conforming.  These are loans above the previous conforming limit of $417,000 and below the upper limit of $729,750.  Interest rates for these loans have fallen recently to 1/2 to 5/8% above the conforming loan rate.  Jumbo loans are now priced 2 1/8% above the conforming loan rate.  Our hope was that the higher conforming loan rate would improve the affordability of loans up to the higher conforming loan limit while maintaining the traditional premium for a jumbo loan.  As the financial markets have implemented the higher limit, they have made the new jumbo loan much less affordable and only marginally improved the jumbo conforming affordability.  The higher conforming loan rate program has proven to be very disappointing!

One measure of area sales that we monitor is the "absorption rate".  This value is the number of properties on the market divided by the properties sold in the prior period.  Stated differently, absorption rate is the number of months it would take to sell all the properties currently on the market assuming no additional properties are brought on the market and the rate of sales remains constant.  In our area, the rates have all increased but vary between cities.  Examples of the current absorption rates for the 1st Quarter of 2008 are:

City Name   2008  /  2007
Altadena   6 months  /  3 months
La Canada   4.5 months  /  3.2 months
Pasadena Homes   6.6 months  /  2.3 months
Pasadena Condos   5.9 months  /  3.4 months
San Marino   2.5 months  / 1.3 months

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   $511,250   -18.8%
Arcadia   $630,000   -13.2%
Azusa   $320,000   -27.2%
Duarte   Insufficient Data
La Canada/Flintridge   Insufficient Data
La Crescenta   Insufficient Data
Monrovia   Insufficient Data
Pasadena   $550,000   -8.2%
San Gabriel   $510,000   -7.1%
South Pasadena   Insufficient Data
Temple City   Insufficient Data

Source: California Association of Realtors and DataQuick Information Services


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Sharon and Rick Stever