Real Property Report - California, June 2015

California Home Sales and Median Prices Jump in June

Median Home Prices Up 2.5 Percent to $415,000

Sales Gain 8.5 Percent

CALIFORNIA, JULY 15, 2015 -- California single-family home and condominium sales gained 8.5 percent to 41,539 in June from 38,143 in May. On a year-over-year basis, sales were up 16.4 percent from 35,681 in June 2014. Driving the increase in sales was the 19.9 percent year-over-year increase in non-distressed property sales. Of note to investors, distressed property sales volume has remained nearly unchanged for 18 months and continues to remain a source of opportunity.

“After a mediocre May, California real estate sales took off in June,” said Madeline Schnapp, Director of Economic Research for PropertyRadar. “The year-over-year jump was the largest since October 2012 likely due to improving economic conditions and fear of rising interest rates this fall.”

The median price of a California home in June was $415,000, the highest since November 2007. The median price was up $10,000, or 2.5 percent, from $405,000 in May. Within California’s 26 largest counties, 19 counties saw median price increases while 7 experienced price decreases. The counties with the biggest median price increases were San Joaquin (+8.5 percent), San Diego (+5.7 percent), and Ventura (+5.5 percent).

On a year-over-year basis, the median price of a California home was up 5.1 percent from $395,000 dollars in June 2014. At the county level, year-over-year median price increases exceeded 5 percent in 18 of California’s 26 largest counties, and 7 of those experienced double-digit price increases. The counties with the largest price increases were San Mateo (+20.0 percent), San Francisco (+14.7 percent), Sonoma (+11.5 percent), and Solano (+11.3 percent).

"The jump in June median prices surprised us," said Schnapp. “Despite affordability issues, strong sales in June pushed median prices higher.”

Flip sales have been steadily increasing since January 2015, up 2.0% for the month and 1.3% over the past 12 months. More importantly flip says have increased 43.4% since the beginning of the year. Short sales also posted strong gains in June, up 5.7% for the month and 2.2% year-over-year. Short sales have increased 52.8% since January 2015.

“Flippers and short sellers are finding plenty of willing buyers,” said Schnapp. “With prices already high and moving higher, this market leaves room for investors to jump in and an attractive time to sell.”

In other California housing news:

• Cash sales, at their second highest level since May 2014, were up 3.1 percent for the month and up 1.5 percent in the past twelve months. Cash sales totaled 8,397 in June and represented 20.3 percent of total sales. Cash sales as a percentage of total sales remain high but have been steadily declining since reaching a peak of 40.0 percent of total sales in August 2011. Since then, cash sales are down 42.6 percent.
• Foreclosure notices and sales reached their lowest levels in our records dating back to January 2007. Notices of Default and Notices of Trustee sale fell for a second consecutive month in June, down 11.4 and 10.4 percent for the month, respectively. Foreclosure sales fell 7.8 percent for the month and are down 16.9 percent year-over-year.
• The number of homeowners in a negative equity position continued downward in June thanks to rising prices. In June approximately 7.7 percent of homeowners, or 670,000, owed more than their home was worth, down 1.5 percent for the month and 39.0 percent from June 2014. We started 2015 with just over one million California homeowners underwater.
• June Institutional Investor LLC and LP purchases totaled 1,320, down 2.4 percent for the month but up 1.3 percent from June 2014. Since reaching a peak in December 2012, institutional investor demand has declined due to the lower return on investment and dwindling supply of distressed properties for sale. Seasonality notwithstanding, since April 2014 monthly purchases have remained more or less constant at 1,350. Similarly, Trustee Sale purchases by LLC and LPs were down 82.9 percent from their October 2012 peak but have trended mostly sideways since May 2014.

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 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 2012 to current. Median sales prices are divided into three categories: All single-family homes (black line), distressed properties (red line), and non-distressed properties (blue line). Monthly sales volumes (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.