SAN FERNANDO VALLEY HOUSING REPORT FOR OCTOBER 2008
San Fernando Valley Economic Research Center
CALIFORNIA STATE UNIVERSITY, NORTHRIDGE
Dr. Daniel Blake, Director 818-677-7021
San Fernando Valley year-over-year home sales doubled in October—up 98.0% from October 2007. This doubling in year-over-year sales last month reflects two elements—1) last year’s low sales level due to the mortgage market meltdown and falling home prices, and 2) the steady upward march of home sales this year. In fact, October home sales rose 15.5% from September, making this month’s increase the second highest this year. The near-term home sales outlook will depend on the interplay of the positive effects of attempts to restart the mortgage market by Washington policy-makers and the dampening effects of the expected near-term job losses.
October 2008 September 2008 October 2007
SFV Home Sales 1,461 1,265 738
12 month change +98.0%
The Valley’s median price of a single-family, detached home halted its downward course, at least momentarily, by rising from $400,000 in September to $405,000 in October. Still, October’s $405,000 median price is 31.2% below October 2007. This does not mean that housing prices have bottomed out, but the increasing sales and slower price descent mean that Valley housing has become more affordable causing a number of previously sidelined buyers to buy. Once it becomes obvious that home prices have bottomed out, which could be several thousands if not tens of thousands below the current median price, more buyers will join in.
October 2008 September 2008 October 2007
SFV Median Price $405,000 $400,000 $589,000
12 month change -31.2%
Notices of Default (NODs) continued at depressed levels in October due to a new requirement that homeowners be given a 30-day notice before filing a Notice of Default. October NODs dropped to 588 from 977 last October (down 39.8%) but rose slightly from the 524 NODs in September, the first effective month of the new regulation. Whether NODs stay at lower levels for the near term or rise back toward the 1,500 range of summer months depends on both homeowners’ and lenders’ reactions to this new grace period, on lender’s holiday period policies, and on mortgage and credit market policies now being fashioned in Washington.
October 2008 September 2008 October 2007
SFV NODs 588 524 977
12 month change -39.8%
October foreclosures, at 549, are down 33.2% from the September level of 822, but are 32.6% above October 2007’s 302 foreclosures. This lower foreclosure rate, relative to the 850 per month average of the last four months, undoubtedly relieved some of the downward pressure on home prices in October. If Notices of Default and foreclosure rates remain relatively subdued and the Washington credit and mortgage market policies provide some relief and reduce uncertainty, home prices may stabilize and sales resume near normal levels in the near future.
October 2008 September 2008 October 2007
SFV Foreclosures 549 822 414
12 month change +32.6%
LA County Foreclosures 2,459 3,644 1,660
12 month change +48.1%