Key points are:
- Total transaction is 21,502, down 10% from July 2009 (usually transactions in August are higher than that of July.
- 21,502 transactions are smaller than average transactions of last 20 years (27,458).
- Key reasons are 1) inventory of distressed properties has gone down, 2) uncertain economic condition & 3) median sales price has been increasing since April.
- Share of REO (bank owned property) is 38.8%, down from 40.7% in July and 56.7% in February 2009.
- Median sales price was $275,000, up 2.6% from $268,000 in July and from $247,000 in April 2009 (the peak median price was $505,000 in mid 2007).
- Share of FHA mortgage is 37.4% (24% nationwide), up 10 points from August 2009.
I believe real estate markets in former bubble area like CA/NV/AZ/FL is facing "mini-bubble" from first time home buyers. However, as I pointed out in previous posting, real estate markets in former bubble area might face "second dip" in near future.
Below is possible problems:
- $8000 First Time Home Buyer Tax Credit expires on November 30th 2009.
- 23% of mortgage holders nationwide have negative equity (approx. 40% in California).
- Banks are accelerating foreclosure.
- Possible "shadow inventory" of distressed/REO homes in millions.
While this analysis is about Southern California, August 2009 Bay Area real estate transaction has gone down by 14.8% Vs. July 2009. I think you can see same transaction trend in other former bubble markets such as Las Vegas and Phenix. Let's see if "second dip" will happen or not!