subject: Demand Still Low, Any Hope for O.C. Homes? [print this page] Demand Still Low, Any Hope for O.CDemand Still Low, Any Hope for O.C. Homes?
The final numbers for our housing market this past winter were just plain poor. It looks like spring will follow with a poor start as well, but there may be some hope in the "pending sales" numbers to boost our economy in the housing sector. First glance spring may be slow out the game, but basic economics and upcoming sales forecasts are playing role to find new hope for Orange County.
Our current housing numbers are not showing any optimism though. Census Bureau's new home sales for February fell well below consensus to new national historical low. Hard to fathom how this can get worse. Furthermore, supply of new homes rose to 8.9 months from 7.4 months in January, which means downward pricing pressure early this spring. Median new home prices already dropped 8.9% year-over-year. Any construction is stalled at best, and most builders are not able to offer quality homes and lots with the market in its current state of decline. On the other hand, the "pending sales" tally was up nearly 21% from January's level as the spring homebuying season started to pick up, the state Realtors group said.
But, throughout the United States existing home sales this February fell 9.6% compared to January 2011 and February 2010. Months of supply jumped to 8.4 nationally; median prices declined 4.2% year-over-year. Depreciation is being seen in all segments of the housing market. Statewide, California Association of Realtors' February numbers confirmed that home sales were sluggish in California,too. Prices were dropping modestly. CAR numbers about short-term supply and demand conditions hint at further price weakness if demand does not pick up. California inventory for single-family homes jumped to 7.3 months from 6 months in February 2010. Regionally, CAR supply numbers were disconcerting. February's months of inventory were 7.8 in Los Angeles, 8.9 San Diego, and 9.6 in Orange County! This is a difficult sight for any Orange County appraiser.
Orange County homes are beginning spring at a stand still, a crawl even, but there is a glimpse of optimism that the economy will play out "correctly" and find new sales by summer. The prices are certainly low, let's cross our fingers that someones buying.
