Real Property Report - California, December 2014

December Sales Up 7 Percent Month-over-Month

Sales for All of 2014 Down 11.4 Percent Y-o-Y

Median Prices Nearly Unchanged Since May 2014

December California single-family home and condominium sales increased 7.0 percent to 27,770 units, up from 25,964 in November but down 11.4 from 31,340 in December 2013. Total sales for the entire year (January through December) fell 11.7 percent from 2013 and were the lowest since 2007.

“As we predicted early in 2014, sales volume stayed near 7-year lows throughout 2014 because prices rose too far too fast in 2012 and 2013,” said Madeline Schnapp, Director of Economic Research for PropertyRadar. “While prices are likely still too high, 2015 may fair slightly better thanks to mortgage interest rates trending lower and loosening lending standards.”

The December median price of a California home was nearly unchanged at 385,000 dollars, down 2,500 dollars, or 0.6 percent from 387,500 dollars in November. Median prices have been more or less unchanged since May 2014 when the median price peaked at 390,000 dollars. On a year-ago basis, median home prices were up 5.5 percent.

The number of homeowners in a negative equity position fell 1.1 percent to 987,000 in December, from 998,000 in November. In December, approximately 11.4 percent of California homeowners owed more than their home was worth, down from 1.4 million, a decline of nearly 28.5 percent from a year ago.

“The California real estate market continues to show steady improvement,” said Schnapp. “Nearly one in three homeowners with negative equity in 2014 saw their finances improve significantly as they transitioned from negative to positive equity this past year. Many homeowners are now free to participate in the real estate market or refinance their homes.”

Consistent with the overall increase in December sales, cash, flip, and institutional investor sales posted increases in December. Foreclosure notices also posted increases for December. Specifically:

• Cash sales were 6,127 in December up 5.0 percent from November and were 22.1 percent of total sales. Despite the uptick in December, cash sales have been steadily declining since reaching a peak of 40.0 percent of total sales, or 14,028, in August 2011. Since then, cash sales have fallen 56.3 percent. Within the 26 largest counties in California, cash sales as a percentage of total sales, were highest in Sacramento, Riverside, and San Diego counties.
• Flip sales totaled 969 in December, gaining 1.9 percent for the month, but were down 36.0 percent for the year. Flip sales are defined as properties that have been resold within six months. Flip sales comprised 3.5 percent of total sales in December, down 0.1 percent from November. Flip sales peaked in May 2013 at 5.1 percent of total sales and have declined 49.0 percent since then. Within the 26 largest counties in California, Fresno, Sacramento, and Los Angeles had the highest percentage of flips at 5.7, 4.5, and 4.3 percent, respectively.
• Institutional Investor LLC and LP purchases totaled 1,030 in December and were up 13.6 percent for the month but down 18.8 percent from December 2013. Volatility is normal this time of year and will likely subside in ‘Q1 2015. Over the longer term, however, as the supply of distressed properties dwindled and prices rose, institutional investor demand retreated due to the lower return on investment. In general, Institutional Purchases have posted consistent monthly declines since peaking in December 2012 and are down 53.6 percent since then. Similarly, Trustee Sale purchases by LLC and LPs are down 82.7 percent from their October 2012 peak.
• Foreclosure starts, Notices of Default (NODs), increased 8.1 percent between November and December but are down 14.3 percent from December 2013. The monthly increase is likely due to increased volatility around the holiday season. Foreclosure Sales gained 6.9 percent for the month but were down 21.6 percent for the year. Over a longer period, both foreclosure notices and sales have been trending lower. 

Home Sales

Home Sales - Single-family residence and condominium sales by month from 2007 to current divided into distressed and non-distressed sales. Distressed sales are the sum of short sales, where the home is sold for less than the amount owed, and REO sales, where banks resell homes that they took ownership of after foreclosure.  All other sales are considered non-distressed.‍

Year-over-Year Home Sales

Year-over-Year Home Sales - Single-family residences and condominiums sold during the same month for the current year and prior years divided into distressed and non-distressed sales.

Median Sales Prices vs. Sales Volume

Median Sales Price vs. Sales Volume - Median sales price (left axis) of a California single family home versus sales volume (right axis), by month from 2005 to current.  Median sales prices are divided into three categories: All single-family homes (blue line), distressed properties (red line), and non-distressed properties (green line). Monthly sales volume (right axis) are illustrated as gray and lavender bars.  The gray bars are distressed sales and the lavender bars are non-distressed sales.‍

California Homeowner Equity

California Home Owner Equity - A model estimate of California homeowners segregated into various categories of levels of homeowner equity for a given month.  Homeowner numbers represent a percentage of total California homeowners.

Cash Sales

Cash Sales - The blue bars (right axis) illustrate cash sales of single-family residences and condominiums by month. The red line (left axis) illustrates cash sales as a percentage of total sales by month.

Flipping

Flipping – The number of single-family residences and condominiums resold within six months.

Market Purchases by LLCs and LPs

Market Purchases by LLCs and LPs - The blue bars (right axis) illustrate market purchases of single family residences and condominiums by LLCs and LPs from 2007 to current. The red line graph (left axis) illustrates LLC and LP purchases as a percentage of total sales by month.

Market Sales by LLCs and LPs

Market Sales by LLCs and LPs - The blue bars (right axis) illustrate market sales by LLCs and LPs of single-family residences and condominiums by month. The red line graph (left axis) illustrates sales as a percentage of total sales by month.

Trustee Sale Purchases by LLCs and LPs

Trustee Sale Purchases by LLCs and LPs - The blue bars (right axis) illustrate trustee sale purchases (foreclosure sales) of single-family residences and condominiums by LLCs and LPs from 2007 to current. The red line graph (left axis) illustrates purchases as a percentage of total trustee sales by month.‍

Foreclosure Notices and Sales

Foreclosure Notices and Sales - Properties that have received foreclosure notices — Notice of Default (green) or Notice of Trustee Sale (blue) — or have been sold at a foreclosure auction (red) by month.‍

Foreclosure Inventories

Foreclosure Inventory - Preforeclosure inventory estimates the number of properties that have had a Notice of Default filed against them but have not been Scheduled for Sale, by month. Scheduled for Sale inventory represents properties that have had a Notice of Trustee Sale filed but have not yet been sold or had the sale cancelled, by month. Bank-Owned (REO) inventory means properties sold Back to the Bank at the trustee sale and the bank has not resold to another party, by month.‍

Real Property Report Methodology

‍California real estate data presented by PropertyRadar, including analysis, charts, and graphs, is based upon public county records and daily trustee sale (foreclosure auction) results. Items are reported as of the date the event occurred or was recorded with the California county. If a county has not reported complete data by the publication date, we may estimate the missing data, though only if the missing data is believed to be 10 percent or less of all reported data.