February Sales Up 3.3 Percent From January
Median Price Gains 1.6 Percent
February 2015 California single-family home and condominium sales were 23,404, up 3.3 percent from 22,659 in January, the largest February increase since 2012. On a year-over-year basis, sales were down 2.4 percent. Regionally, February sales were up 2.0 percent across the nine Bay Area counties, 4.7 percent in Southern California, and 9.5 percent in Central California.
“Home sales picked up in February,” said Madeline Schnapp, Director of Economic Research for PropertyRadar. “The acceleration is likely due to the mild winter weather but could also be a precursor of more robust sales this coming spring.”
The median price of a California home was 375,000 dollars in February, a gain of 6,000 dollars, or 1.6 percent, from 369,000 dollars in January. On a year-over-year basis prices were up 6.5 percent. For the month, median prices rose in 18 of the 26 largest California counties ranging from an increase of 1.7 percent in San Diego County to 16.7 percent in Contra Costa County.
“The increase in median prices in February usually points to higher prices in spring,” said Schnapp. “While the warm winter weather is the likely culprit, we can’t rule out other positive economic forces like robust job growth throughout 2014. Time will tell.”
Foreclosure activity declined in February. Despite the February decline, foreclosure activity has been trending sideways since November 2013. February Notices of Default totaled 5,800, down 4.5 percent from 6,075 in January. Foreclosure Sales totaled 1,868, down 15.9 percent from January. Click for more foreclosure trends.
“The low level of foreclosures is a good news, bad news story,” said Schnapp. “While the decline in foreclosures means the housing crisis is for the most part history, it also means lower priced inventory, attractive to both first-time home buyers and investors, is scarce.”
In other California housing news:
- Cash sales were 5,911 in February, up 4.1 percent from January and represented 25.6 percent of total sales. Cash sales should increase over the next few months mirroring the increase in overall sales. Over a longer period of time, cash sales have been steadily declining since reaching a peak of 40.0 percent of total sales in August 2011. Since then, cash sales are down nearly 58.0 percent.
- Flip sales total 772 in February, down 7.7 percent for the month and 32.7 percent for the year. Flip sales are defined as properties that have been resold within six months. Flip sales comprised 3.3 percent of total sales in February, down 0.4 percent from January. Flip sales peaked in May 2013 at 5.1 percent of total sales and have declined 60.0 percent since then.
- Institutional Investor LLC and LP purchases in February totaled 1,001, down 8.2 percent for the month and 10.4 percent from February 2014. Over the longer term, institutional investor demand has retreated due to the lower return on investment and dwindling supply of distressed properties for sale. Purchases are down 54.9 percent since peaking in December 2012. Similarly, Trustee Sale purchases by LLC and LPs are down 86.8 percent from their October 2012 peak.
- February Foreclosure starts, Notices of Default (NODs), were down 4.5 percent from January and down 17.2 percent in the past 12 months. Despite the February decline, Foreclosure Notices have been trending mostly sideways, indicative of a bottoming process, since November 2013. Foreclosure Sales fell 15.9 percent for the month and were down 27.9 percent in the past 12 months.
“The decline in cash and flip sales merely reflects the decline in institutional investor purchasing activity,” said Schnapp. “The rise in prices has put downward pressure on the return on investment thus reducing cash and flip sales.”