SAN FERNANDO VALLEY HOUSING REPORT FOR AUGUST 2008
San Fernando Valley Economic Research Center
CALIFORNIA STATE UNIVERSITY, NORTHRIDGE
Dr. Daniel Blake, Director 818-677-7021
San Fernando Valley home sales slowed in August—down 5.0% from August 2007 and down 10.1% from last month. The August drop in home sales from July is the first monthly drop during 2008; until August, Valley home sales had increased every month beginning in January. On the other hand, August home sales were higher than June sales (1,155) and every other month in 2008, so perhaps the increasing sales trends continues with July sales representing a small spike in a slowly improving market. In any case, the current uncertainty in the credit (mortgage) markets and California’s slow job market are likely to be a drag on near-term home sales.
August 2008 July 2008 August 2007
SFV Home Sales 1,188 1,321 1,262
12 month change -5.0%
The Valley’s median price of a single-family, detached home continued its downward course in August, falling to $420,000. Slow sales and rising foreclosures continue to put downward pressure on housing prices—August’s median price fell 35.4% from August 2007 when the Valley’s median price came in at $650,000. Valley median housing prices peaked in May 2007 at $660,000 for a single family detached home. The brighter side of this price slide is that it opens doors to more and more would be home buyers every month.
August 2008 July 2008 August 2007
SFV Median Price $420,000 $453,500 $650,000
12 month change -35.4%
After dropping somewhat in May and June, Notices of Default (NODs) edged up in July and August, but remained below both March (1,553) and April (1,560) levels. Given the last 6 months’ numbers, NODs seem to have plateaued in the neighborhood of 1,500 per month. Notices of Default typically take about 100 days to turn into foreclosures if the mortgage delinquency is not resolved or the mortgage renegotiated (which some are). The continued high level of NODs is worrisome for foreclosure rates because credit for mortgage refinancing is tight and because many current occupants cannot afford their current or even a renegotiated mortgage.
August 2008 July 2008 August 2007
SFV NODs 1,518 1,509 833
12 month change +46.7%
August foreclosures, at 923, continue at a record breaking pace, after the second quarter 2008 foreclosures of 2,084 exceeded the previous record by 266, or 14.6%. (The previous quarterly high of 1,818 occurred in the second quarter of 1996.) This month’s still-climbing number of foreclosures will produce another record breaking foreclosure rate this quarter given the still high number of Notices of Default.
August 2008 July 2008 August 2007
SFV Foreclosures 923 844 289
12 month change +219.4%
LA County Foreclosures 4,149 3,874 1,281
12 month change +223.9%