What's New at Moore Appraisals

An estimated 41,837 new and resale houses and condos were sold statewide last month. That was up 16.7 percent from 35,860 in November, and up 10.6 percent from 37,836 for December 2008. An increase in sales from November to December is normal for the season. California sales for the month of December have varied from a low of 25,585 in 2007 to a peak of 65,793 in 2004, the average is 44,708. MDA DataQuick's statistics go back to 1988.

The median price paid for a home last month was $264,000, up 1.1 percent from $261,000 in November, and up 6.0 percent from $249,000 for December a year ago. The year-over-year increase was second in a row, following 27 months of year-over-year decline. The median peaked at $484,000 in early 2007 and hit a low of $221,000 last April.

Of the existing homes sold last month, 41.0 percent were properties that had been foreclosed on during the past year. That was up from a revised 40.1 percent in November and down from 55.2 percent in December a year ago. It peaked at 58.8 percent last February.

The typical mortgage payment that home buyers committed themselves to paying last month was $1,125. That was up from $1,106 in November, and up from $1,110 for December a year ago. Adjusted for inflation, last month's mortgage payment was 47.3 percent below the spring 1989 peak of the prior real estate cycle. It was 57.3 percent below the current cycle's peak in June 2006.

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Southern California home sales rose in October as prices showed more signs of firming. The median sale price fell by the smallest amount in two years, the result of a shrinking inventory of homes for sale and government and industry efforts to stoke demand and curtail foreclosures, a real estate information service reported.

Two counties – Orange and San Diego – posted modest year-over-year increases in their overall median sale price last month. It was the second consecutive gain for Orange County and the first in more than three years for San Diego. Both counties also posted small annual gains the past two months in their median price paid for resale single-family detached houses.

Last month 22,132 new and resale houses and condos closed escrow in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. That was up 2.8 percent from 21,539 in September and also up 2.8 percent from 21,532 a year earlier, according to MDA DataQuick of San Diego.

October marked the 16th month in a row with a year-over-year sales gain, although last month’s was the smallest of those increases. The 2.8 percent uptick in October sales from September wasn’t unusual, given sales have increased between those two months in half of the years – including 2007 and 2008. The average change between September and October is a decline of just under 1 percent.

Sales increases over the last two months can be partially attributed to the recent increase in short sales, which take longer to close escrow. The result is that some summer deals that might normally have closed earlier instead closed in September and October.

Other factors driving home sales higher of late: A rush by some to take advantage of the federal tax credit for first-time buyers, which was initially set to expire at the end of this month but was recently extended and expanded. Also, mortgage rates remain extremely attractive and, combined with home price declines, have boosted housing affordability.

A critical financing source for first-time buyers purchasing lower-cost homes, especially foreclosures, has been the federally-insured FHA loan. FHA mortgages accounted for 38.3 percent of all Southland purchase loans last month, compared with 32.5 percent a year ago and just 2 percent two years ago. FHA’s share of purchase loans varied last month from 26.2 percent in Orange County to 49.2 percent in Riverside County. They offer down payments as low as 3.5 percent and relatively lenient qualifying standards.

Welcome to the first edition of our new Inland Empire Real Estate Trends Update Report, a quarterly update from an appraiser's perspective. The focus of the quarterly updates will be on Riverside County cities and their current market trends.

For the first time in over a year, our office has noted some stabilization and even slight increase in market value in several areas within Riverside County (some areas of Murrieta, Temecula, Perris and Hemet), with Median Comparable Sale Price and Median Comparable List Price stabilization, Sale Price to List Price increasing, and inventory waning in these noted areas.

The noted stabilization appears to be related to lower inventory of foreclosed homes and peaked interest from buyers/investors looking for bargains in the Inland area and is supported by the increase in orders for purchases we have seen recently. It has also been reported that several large banks have been cautious not to flood the market with too many foreclosures, thus helping the stabilization however this has not been confirmed.

Our next quarterly report will be provided in March of 2010.

David Moore - SCREA

Moore Appraisals