DataQuick Says California Sales Decline for February

California new and existing home and condominium sales in February declined 0.5% from January and fell 3.1% when compared with February 2012, according to San Diego-based DataQuick.

It estimated there were 28,719 sales last month, which is 9.9% below the average of 31,890 sales for all the months of February since 1988, when DataQuick started compiling information.

Of the existing homes sold during February, 17.5% were foreclosure sales, while 22.5% were short sales. One year prior these sales made 33.9% and 26.5%, respectively.

The company added, “It should be noted that market distress indicators in California continue to decline, and foreclosure activity remains well below peak levels that were reached several years ago.”

The median price paid for a home in California last month was $289,000, down 0.3% from $290,000 in January, and up 20.9% from $239,000 in February 2012. DataQuick said February was the 12th consecutive month in which the state's median sale price rose year-over-year.

As for the two most populated areas of the state, the nine-county San Francisco Bay Area had a total of 5,404 new and resale houses and condos sold in February. That was down 1.8% from January and down 6.1% for February a year ago. But sales prices in the area were up 25% over the previous February.

“Isn’t this Economics 101? Supply and demand? If demand outstrips supply in a free market, the price goes up. The last time the number of homes sold exceeded the historical average for a given month was back in 2006. So a lot of demand has accumulated.

“Now, with a recovering economy, prices still closer to the bottom than to the top, with ultra-low mortgage interest rates and tight supply, the stage is set for price gains. This spring is going to be interesting,” said John Walsh, DataQuick president.

As for southern California, there were a total of 15,945 sales in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was down 0.7% and up 1.0% from February 2012.

Walsh said, “March and April will offer a better view of how broader market trends are shaping up this year. One of the real wild cards will be how many more homes go up for sale. More people who've long been thinking of selling will be tempted to list their homes at today's higher prices.

“Fewer people will be underwater and therefore could at least break even on a sale. Some investors who've held for a while will consider cashing in. A meaningful rise in the supply of homes on the market should at least tame price appreciation.”