How Do Laguna Beach Homes Compare with CAR California Real Estate for May?

California Association of Realtors (C.A.R.) May Report – How do the State numbers compare to Laguna Beach Homes for Sale?

According to the California Association of Realtors (C.A.R.), the median price of a home in May increased 23.2%, while home sales increased 1.2%. It will be interesting to see the June numbers now that the Tax Incentive Adjustments have been made. Many believe that these numbers will show an expected decrease.

“Home sales posted their third largest increase on record for May, due in part to first-time home buyers who timed the open and close of escrow in order to capitalize on both the federal and state tax credits,” said C.A.R. President Steve Goddard. “May also marked the fifth month of double-digit gains in the median price, indicative of strong buyer demand relative to the supply of homes for sale. With a 4.6-month supply of homes for sale, unsold inventory continues to be well below the long-run average of seven months, and will continue to drive price appreciation over the next several months.”

Here are some Quick Facts for Home Sales in the State of California:

Existing, single-family home sales increased 1.2 percent in May to a seasonally adjusted rate of 552,800 units on an annualized basis compared with May 2009.
The statewide median price of an existing single-family home increased 23.2 percent in May to $324,430, compared with May 2009.
C.A.R.’s Unsold Inventory Index remained unchanged at 4.6 months in May.

When looking at Peak Prices vs. Current Prices for May of 2010, here are the stats for our area:

Region	Peak Month	Peak Price	May-2010 Median	% Change from Peak
California	May-07	$594,530	$324,430	-45.4%
Orange County	Apr-07	$747,260	$505,750	-32.3%

“The number of escrows opened in May fell 16.9 percent compared with April. This was consistent with our expectation that activity may decline once the federal tax credit deadline had passed, “said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “Although there may be a lessening of demand compared with the first half of this year, the number of escrows opened on a year-to-date basis is about the same as last year, and sales for all of 2010 will be on a par or slightly below last year.”

How Long Are Homes on the Market Before they Sell?

The CAR report shows that the average time on the market for the median priced home sits at 4.6 months. However, with homes for sale in Laguna Beach, you have to remember that the median price of a home in this area sits closer to $1 million dollars, so the average time on market is going to be higher than the median for the state.

Unsold inventory*:

(Thousand)	May-10	Apr-10	May-09
$1 million+	10.1	9.7	16.3
$750-$1Million	5.5	6.4	7.5

*The Unsold Inventory Index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.

How Do Mortgage Rate Compare to Last Year?

Mortgage rates, as a comparison, during May 2010 averaged 4.89%; compared with 4.86 in May 2009.

Note: Large changes in local median home prices typically indicate both local home price appreciation, and often, large shifts in the composition of housing market activity. Some of the variations in median home prices for the month of May could be exaggerated due to compositional changes in housing demand.

How Do Laguna Beach Homes for Sale Compare with other Cities in the State?

Statewide, the 10 cities with the highest median home prices in California during May 2010 include:

Manhattan Beach – $1,555,000
Los Altos – $1,500,000
Saratoga – $1,435,500
Palo Alto – $1,293,500
Palos Verdes Estates – $1,262,500
Newport Beach – $1,100,000
Los Gatos – $1,087,500
Laguna Beach – $960,000
Mill Valley – $945,500
Lafayette – $928,500

Disclaimer

* Based on closed escrow sales of single‑family, detached homes only (no condos). Movements in sales prices should not be interpreted as measuring changes in the cost of a standard home. Prices are influenced by changes in cost and changes in the characteristics and size of homes actually sold.

This is what we have been saying for a while. While the majority of homes that sold during previous months may have been priced in the $200-$500K range (just as an example), homes now may be selling in the $500K+ range. The lower price ranges may reflect a 1500 square foot home where now the homes may be 2000+ square foot in size. So to some extent, you are not comparing apples to apples.

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Until Next Time…