Market slowdown lingers as February home sales drop 12%, CoreLogic reports – Daily News

on Mar27
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With the spring homebuying season getting into full swing and mortgage rates dropping, the local housing market is perking up, local agents say.

The question is, will a recent slowdown linger or will sales get back to the frenetic pace seen in recent years?

If a new housing report out Wednesday, March 27, is any indication, expect a slower spring this year.

Last month saw Southern California home sales fall 11.7 percent from February 2018 levels, with just 13,466 houses, condos and townhomes changing hands, real estate data firm CoreLogic reported. That’s the smallest sales tally for a February in 11 years.

Over the past decade, February averaged 15,000 transactions. Home sales in the six-county region have been down 11 of the past 12 months.

With sales ebbing, prices barely budged– and even fell in Orange County for the first time since 2012.

The median price of a Southern California home – or price at the midpoint of all sales — was $512,500 last month, up just $6,000 or 1.2 percent from February 2018 median, CoreLogic reported. That’s the second-smallest percentage gain since March 2012.

While activity perked up in the past several weeks — with escrows rising and agents reporting multiple offers for mid-priced homes — luxury housing tends to sit, said Colin Delaney, broker for GateHouse Properties in Costa Mesa.

“We’re still seeing multiple offers in prices below $1 million,” Delaney said. “Over $1.2 million, it’s a different story.”

A recent drop in mortgage rates will help some buyers afford a bigger or pricier home. Thirty-year fixed rates fell more than half a percentage point since November.

A buyer who can afford a $3,000-a-month mortgage payment can buy a $762,500 home at today’s rates, estimated Steve Thomas, author of the Reports On Housing market analysis. In November, that same buyer could only afford a home priced at $698,750 or under because of higher interest payments.

“That is an amazing increase of $63,750 in purchasing power,” Thomas wrote.

Riverside agent Christina Clark reported that she recently closed on a four-bedroom Corona Hills pool home that had sold at full price in 24 hours after getting three offers.

“With …  interest rates dropping, it opened things up for people to qualify for a higher price point,” Clark said. “The market is extremely busy now. … Every agent I know has multiple deals in escrow. Buyers are out looking.”

Nonetheless, Clark said it’s still a buyer’s market.

CoreLogic Deputy Chief Economist Ralph McLaughlin agreed.

“We expect buyers to enter the peak buying season a little more confidently than at the end of 2018,” McLaughlin wrote in a recent commentary about Tuesday’s S&P Case-Shiller numbers showing home prices rising by the smallest margin in years. “Homes are sitting on the market longer, and price cuts are becoming more common.”

CoreLogic figures showed home sales fell in all six counties, with declines ranging from 8.1 percent in San Diego County to 17.1 percent in Orange County. Sales were down 8.9 percent in Riverside County, 11.8 percent in Los Angeles County, 12 percent in Ventura County and 13.8 percent in San Bernardino County.

Just four of the six counties had year-over-year price gains: The median home price rose 0.9 percent in Los Angeles County to $585,000, 1.7 percent in Riverside County to $381,500, 1.8 percent in Ventura County to $565,000 and 2.6 percent in San Diego County to $549,000.

San Bernardino County’s median remained unchanged from a year ago at $335,000. Orange County’s median, meanwhile, fell $10,000 or 1.4 percent to $700,000.

The price drop surprised Costa Mesa broker Delaney, who works throughout Orange County’s beach cities.

“The neighborhoods I work in haven’t had price drops,” he said. But “high-end neighborhoods in Laguna Beach and Newport Beach, those prices have come down. That’s probably part of the pull. The entry-level houses still are in high demand.”

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