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Home Sales in Pasadena Defy National Trend
Housing market reports released this week by the National Association of Realtors created cause for alarm when they reported pending home sales were down 16%. This measurement refers to contracts that are signed and properties that enter the escrow process. It’s a forward looking indicator that offers a sales forecast for the next month.
Pasadena home sales remain strong despite national trends
One of the reasons given for the decline was based on the $8000 tax credit for first time home buyers expiring. The credit was actually extended but there was a period in which it did appear that it would expire before it was eventually extended. The other reason is the comparison was judged against the October number, which to me makes no sense at all.
If you have followed our tracking of the Pasadena real estate market, you know that monthly home sales are seasonal and inconsistent with regards to monthly sales volumes.
All real estate markets are local and what happens on a national level doesn’t necessarily indicate what is going on locally. Compare the Inland Empire and its higher rate of mortgage defaults and property devaluation to the San Gabriel Valley and it becomes quite evident.
Things here in Pasadena seem much more positive than what the rest of the country is experiencing. Let me provide a few examples:
Pasadena November Home Sales
Furthermore addressing the pending home sales issue, a quick preliminary look at December sales show a total of 118 residential units were sold in 2009, against 107 units in 2008. The median price of all residential units in December was $524,500 in ‘09 and a lowly $475,000 in 2008.
It does not seem to me there should be much cause for concern.
I think what this also indicates is the $8000 tax credit is less important to Pasadena home buyers than it is to a home buyer in Shelbyville, Indiana. When you can buy a house for $55,000, the $8000 represents a 14.5% subsidy. Compare that to our median price in December of $524,500 and that $8000 gets you a whopping 1.5%.
The good news is that once the incentives expire again in April we should be able to drive right over the speed bump.
