Palos Verdes Real Estate Continues Recovery
South Bay and Palos Verdes real estate continued its recovery as it enters the seasonably slow early summer months. If June and July housing numbers show similar strength, it will ne a very good indication that we are in a sustained recovery. May 2012 Palos Verdes real estate agents' statisticsreflect more of the same growth we experienced last month. 55 Palos Verdes houses sold in May which is exactly the same as April. May pending sales are just about the same as April – 63 homes compared to 64 in April. The number of active Palos Verdes homes for sale in May rose just 4 homes to 182 in May from 178 homes in April. As you can see from the chart above, inventory of homes for sale has been flat for the last 6 months indicating a high demand for homes in the Palos Verdes area.
The average sales price for Palos Verdes homes sold in May increased to $1,439,000 compared to $1,369,000 in in April. Price per square foot for Palos Verdes houses that sold/closed escrow in May also increased to $494 from $486 in April. Average days on market in May was 106 days which was more than the 90 days in April for properties sold that month. Months of inventory (months it would take to sell existing inventory at the current rate of sale) was to 3.3 months for May which was just about the same as April which was 3.2 months. A “normal” market is considered 6 months of inventory – so we are experiencing better than normal in this area.
Presently, there are 196 single family Palos Verdes homes for sale. There are 114 Palos Verdes homes in escrow (55 homes have pending sales and 59 homes are accepting backup offers). In addition, 24 homes have sold/closed escrow in the first 11 days of May with the average sales price of $1,564,742.
California Real Estate Market Update
California home sales and prices rise in May Sales jump 17.6% year over year, while the state's median home price hit $270,000, rising 8.4% from May 2011.: Home sales and prices strengthened throughout California in May, providing the latest evidence that housing might be snapping out of its long slumber. Sales popped 9.3% from April and jumped 17.6% from May 2011 to total 41,790 new and previously owned houses bought statewide, according to real estate research firm DataQuick of San Diego. The state's median home price hit $270,000, rising 2.3% from the prior month and up 8.4% from May 2011. "It's not exactly a stampede, but people are starting to move off the housing market sidelines in numbers we haven't seen in quite a while," DataQuick President John Walsh said. "And it's not just first-time buyers and investors. There are more move-up buyers in mid- to high-end coastal counties." Home sales in the Golden State have posted year-over-year gains for 10 consecutive months, and foreclosures have steadily been making up a smaller share of the market. Sales of distressed homes made up 46.2% of the market, the lowest figure since April 2008.
Economic and Interest Rate Outlook
Economic data released in the U.S. last week offered little enthusiasm for U.S. growth prospects. The Import Price index fell -1.0% as expected. The Producer Price Index declined and did so at a greater clip than expectations (-1.0% vs. -0.6%). In addition, the Consumer Price Index fell more than expected (-0.3% vs. -0.2%). All fueled speculation that the Fed could ease again as inflation does not appear to be a threat. Initial Jobless Claims rose to 386k against expectations for a small decline to 375k. June Empire Manufacturing was very weak (2.29) especially when compared against expectations it would drop from 17.09 in May to 12.50. Industrial Production fell -0.1% vs. expectations for an increase of 0.1% and Capacity Utilization ticked lower to 79.0%. Finally, Consumer Confidence fell more than expected (74.1 vs. 77.5.).
The summer of 2012 does not seem to be turning out much better than last year. We are still watching a slow-moving train wreck in Europe which now is having a growth impact in the U.S. A positive (pro-austerity) Greek vote could calm things for a while but the big sovereign debt issues remain whether or not Greece stays in the Euro or not. This week, all eyes will remain focused on Europe in addition to: Housing Starts, Building Permits, Existing Home Sales, Initial Jobless Claims, Philadelphia Fed Index, and an FOMC meeting with their statement released on Wednesday.
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