December home sales lowest since 2007 34,949 homes closed escrow in California during December 2013. This is up 5% from the prior month and down 12% from one year earlier when 39,760 sales took place. December’s 12% year-over-year decrease continues the downward trend experienced in home sales volume throughout most of this year. At this time last year, home sales volume was still high, riding the wave of low interest rates. However, increases in both home prices and mortgage interest rates stifled upward movement in sales volume in 2013. 2013 ended with 446,419 home sales, roughly level with the 449,059 home sales in 2012. Home sales volume remained down by around 40% from the peak year of 2005 when 753,876 sales closed escrow. first tuesday forecasts a slightly weaker home sales volume for 2014 than experienced in 2013. This reflects the 2010-2011 experience in home sales volume as it occurred after the 2009 tax stimulus. 2012-2013 received a similar “stimulus” from speculators who propped up sales volume and prices. Now, as they continue to exit the market in 2014, expect sales volume to reduce and prices to slip, as sufficient end user demand is still lacking due to slow job creation and high mortgage rates. The bumpy recovery pattern continues — but the ride is getting rougher, and the duration frustrating. California’s real estate sales volume needs about 60,000 homes sold monthly to fully recover. That recovery is dependent on 18-24 months of annual California job growth exceeding 350,000-400,000 jobs. We are nowhere close at this point in the recovery, but likely will be around 2016
Posted on: Thu, 23 Jan 2014 05:38:28 +0000
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