The Credit Crisis of 2007 and
ensuing economic recession has substantially impacted Southern California
market conditions. Case Shiller index reports a 19.9% decrease in the Los
Angeles MSA home price index from 273.94 in September 2006 to 219.47 in April
2014. The index has remained relatively stable from October 2013 to April 2014.
See Chart
LOS
ANGELES-LONG BEACH-GLENDALE METROPOLITAN DIVISION
(LOS
ANGELES COUNTY)
“Nonfarm
employment up by 4,800 jobs over the month; up 88,800 jobs over the year
The
seasonally adjusted unemployment rate in Los Angeles County decreased over the
month to 8.1 percent in June 2014 from a revised 8.2 percent in May 2014 and
was below the rate of 10.0 one year ago. Civilian employment increased by
11,000 to 4,587,000 in June 2014, while unemployment decreased by 4,000 to
404,000 over the month.
The
civilian labor force increased by 5,000 over the month to 4,990,000 in June
2014. (All of the above figures are
seasonally
adjusted.) The unadjusted unemployment rate for the county was 8.2 percent in June
2014.
The
California seasonally adjusted unemployment rate was 7.4 percent in June 2014, 7.6
percent in May 2014, and 9.0 percent a year ago in June 2013. The comparable
estimates for the nation were 6.1 percent in June 2014, 6.3 percent in May
2014, and 7.5 percent a year ago.”
Dataquick reports:
"Southland
Home Sales Down from Last Year Again; Price Gains Throttle Back
July 15, 2014
La Jolla, CA---Southern California homes sold at the slowest
pace for a June in three years as investor purchases fell again and other
would-be buyers continued to struggle with inventory and affordability
constraints. The median price paid for a home rose to its highest level in 77
months but the single-digit gain from a year earlier was the smallest in two
years, a real estate information service reported.
A total of 20,654 new and resale houses and condos sold in Los
Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last
month. That was up 5.6 percent from 19,556 sales in May, and down 4.4 percent
from 21,608 sales in June last year, according to DataQuick, which is owned by
Irvine-based CoreLogic, a leading global property information, analytics and
data-enabled services provider.
On average, sales have increased 6.4 percent between May and
June since 1988, when DataQuick’s statistics begin. Sales have fallen on a year-over-year
basis for nine consecutive months. Sales during the month of June have ranged
from a low of 18,032 in June 2008 to a high of 40,156 in June 2005. Last month
was 23.7 percent below the June average of 27,069 sales. Sales haven’t been
above the long-term average for more than eight years.
“Pent-up demand, job growth and still-low mortgage rates
continue to put pressure on home prices. But they’re climbing at a much slower
pace than a year ago. In many markets price appreciation has slipped into the
more sustainable single-digit range, compared with gains exceeding 20 percent
this time last year. Why the drop-off? The supply of homes for sale, while
still low in an historical context, is higher this year, and the decline in
affordability serves as gravity for home prices. People can’t stretch with
exotic and risky loans the way they could during the last housing boom,” said
Andrew LePage, a DataQuick analyst.
“Many
of the market indicators we track continue to ease toward normalcy,” he added.
“For example, the use of larger, so-called jumbo loans is up significantly this
year, as is the use of adjustable-rate mortgages. Distressed property sales are
way down and, related to that, investor and cash purchases are trending lower,
toward more normal levels.” ”
