Resale home sales were down in June amid a very tight supply, but prices way up. Bubble time is coming again and then we all know what’s after that. We generally go approximately 14 years peak to peak and trough to trough in the Southern California market Will we be right on time again this time?
A total of 21,608 new and resale homes and condos closed in June 2013. That’s down 6.2 percent from May and down 2.1 percent from June of last year.
Now the good news if you’re a seller. Of course if you have to buy a replacement property, it might not be so good. Median price was up to $385,000, up 4.6 percent in May and up a blistering 28.3 percent from June 2012. The year over year increase is the highest since Data quick has been keeping records, starting in 1989.
Still though, the median is 23.8 percent below the previous cycle’s peak in summer 2007 of $505,000. The median price has risen over the last 15 consecutive months and I think will continue to do so easily eclipsing the previous 2007 peak. However, this rate of increase isn’t sustainable will only serve to bring the next crash that much sooner.
“This market’s getting really interesting. Rates have shot up enough to put a dent in housing affordability. Investor and cash buyers are starting to back off a bit, while there’s evidence the supply of homes on the market, while still thin by historical standards, has risen meaningfully. We saw an amazing pop in home prices over the last year. Now we see signs suggesting that blistering pace won’t persist. We continue to believe that a ‘supply response’ to the run-up in prices will gradually tame price appreciation. If mortgage interest rates shoot up again then that’s virtually a given,” said John Walsh, DataQuick president.
I think we’re sitting at a repeat of about 2005 right now and have a couple years left in this boom. Price increases moderate and we can go longer before the next bust. It keeps up at this pace I’d say about 2015 for a little ‘adjustment’ We shall see .
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