Housing indicators in Northern and Southern California remained largely mixed in the latest monthly numbers available from DataQuick at press time. Southern California home values, which impact reverse mortgage originations, were up from October, but down from November 2010.
DataQuick president John Walsh said in an interview that the limited availability of credit continues to hold housing market recovery in general back and in these areas in particular there also concerns about overbuilding in areas further away from the coast.
In Northern California, for example, “the peninsula is not significantly overbuilt” but areas further from the water are, he said. In Southern California areas like the Inland Empire around Riverside also continue to suffer from overbuilding that occurred during the housing market's boom between 2005 and 2007 that preceded its recent, inordinate bust.
In total in Southern California, 16,884 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in November, up 0.3% from October and 4.2% from November 2010, according to the La Jolla, Calif.-based real estate information service. More often than not, sales have dropped between October and November. While November sales of existing houses and condos combined rose 5.8% from a year earlier, sales of newly built homes fell 15.2% to the lowest level on record for a November. Above $800,000, sales fell 17.6% year-over-year. November sales fell 22.8% from a year earlier in the $600,000-$750,000 range, which in coastal counties was impacted by the recent lowering of conforming loan limits.
The median price paid for all new and resale Southland houses and condos sold was $275,000, up 1.9% from $270,000 in October but down 4.2% from $287,000 in November 2010. Distressed property sales accounted for 51.3% of the Southland resale market in November, down from 52.3% in October and down from 53.4% a year earlier. Nearly one out of three homes resold in November was a foreclosure, while roughly one in five was a short sale.
Credit conditions showed no signs of improvement in November, when the level of both adjustable-rate mortgages and larger jumbo home loans were at a low point for this year. Beyond the overall credit crunch, lower conforming loan limits that took effect Oct. 1 continued to impact the housing market. Lawmakers recently restored the higher limits, which vary by county, for FHA loans but not for mortgages guaranteed by Fannie Mae and Freddie Mac.
In Los Angeles and Orange counties, where the conforming loan limit was lowered from $729,750 to $625,500, the number of homes sold with purchase loans in that range totaled 58 in November, down 44.2% from October and down 84.1% from a year earlier. In October, sales with purchase loans in that range fell 71% from September and 71.5% from a year earlier.
The impact of restoring the higher loan limits for FHA loans isn't clear. So far this year, about 14% of Los Angeles and Orange counties purchase loans between $625,500 and $729,750 were FHA insured.
In November, 17.8% of all home sales were for $500,000 or more, the lowest portion since May 2009, when it was 17.4%. November's share of $500,000-plus sales was down a hair from 17.9% in October and down from 21.1% a year earlier.
FHA loans accounted for 32.1% of purchase mortgages in November, up from 31.9% in October but down from 36.2% a year ago. Absentee buyers, mainly investors and vacation-home buyers, purchased a near-record 24.8% of the Southland homes sold in November, paying a median $200,000. November's absentee level was down from 25.4% of sales in October but up from 23.5% in November 2010.
Paying a median $205,000, cash buyers purchased 28.9% of all Southland homes sold in November, down from 30% in October and 29.1% a year ago. Cash purchases hit a high of 32.3% of sales this February, while the 10-year monthly average is 15%. Cash purchases are where there was no indication in the public record that a corresponding purchase loan was recorded.
The typical monthly mortgage payment that Southland buyers committed themselves to paying was $1,049 in November, up from $1,040 in October but down from $1,175 in November 2010. Adjusted for inflation, current payments are 54.8% below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 63% below the current cycle's peak in July 2007. Foreclosure activity remains high by historical standards but is lower than peak levels reached over the last few years. Financing with multiple mortgages is very low, and downpayment sizes are stable, according to DataQuick.
A total of 6,317 new and resale houses and condos sold in the nine-county Bay Area in Northern California during November. That was down 2% from 6,444 in October, and up 3.4% from 6,111 in November 2010, according to DataQuick. The October-to-November sales decline was smaller than normal. The median price paid for all new and resale houses and condos sold in the Bay Area during the period was $363,500. That was up 3.9% from $350,000 in October, and down 4.3% from $380,000 in November 2010. The median has declined on a year-over-year basis for the last 14 months. Distressed property sales made up 47.8% of the resale market in November. That was up from 45.2% in October and 46.7% a year ago.
In November 31% of Bay Area sales were for $500,000 or more, down from a revised 31.3% in October and down from 37.2% in November 2010. FHA home purchase loans accounted for 22.3% of all Bay Area home purchase mortgages in November. That was up from 21.2% in October and down from 23.9% a year earlier.
One indicator of mortgage availability that had seen improvement earlier this year dropped again in November, when 11.6% of the Bay Area's home purchase loans were ARMs, down from a revised 12.9% in October, and up from 9.9% in November last year. Jumbo loans accounted for 29.7% of November's purchase lending, up from a revised 27.9% in October, and down from 33.4% a year ago.
In November absentee buyers purchased 22.6% of all Bay Area homes sold, up from 22.3% in October and 19.1% a year ago. Absentee buyers paid a median $240,000 in November, down from $243,500 in October and the same as a year earlier. Buyers who appear to have paid all cash—meaning no corresponding purchase loan was found in the public record—accounted for 27.9% of sales in November, down from 28.5% in October but up from 25.2% a year ago. The record was 30.5% last February, while the monthly average going back to 1988 is 12.1%. Cash buyers paid a median $240,000 in November, down from $248,000 in October and down from $250,000 a year earlier.
The typical monthly mortgage payment that Bay Area buyers committed themselves to paying in November was $1,387, up from $1,348 in October, and down from $1,504 a year ago. Foreclosure activity remains high by historical standards but below peak levels reached over the last three years. Financing with multiple mortgages is low and downpayment sizes are stable.
