Burbank Real Estate Blog

Economic Recap:

• Pending home sales for September dropped 4.6%, worse than expected.
• Showing extremely weak numbers, total domestic light vehicle sales came in at 7.7 million annual unit sales. This the lowest since the recessionary times in the early 80s. The car rate of 3.9 million is the lowest yet in data going back to 1967.
• The October jobs report fell for a tenth-straight month, showing larger-than-expected job losses and the highest unemployment rate since 1994. Nonfarm payroll employment in October plummeted another 240,000, following a revised drop of 284,000 in September and a revised decrease of 127,000 in August. The For the year-to-date, the economy has lost 1.2 million jobs net.

• Federal Reserve lowered interest rates this week by ½% to 1% for the federal funds rate and 1.25% for the discount rate.
• Consumer Confidence is at it’s lowest level, ever! Or at least since they began tracking this number 40 years ago.
• So far this year we have had 17 bank failures.
• Chicago Purchasing Manager’s Index came in with a steep drop, from 56.7 in September to 37.8 in October. Readings below 50 point to slowing output, reduced orders, which point to reduced consumer spending and demand.
• Both the 3 month and overnight LIBOR rates have dropped. There is a great article….Uncovering the mysteries of the LIBOR, for those interested in further reading.

 Be on the look out for the advance retail sales report due out end of next week. 

As I’ve said before, I think many things need to happen for both the economy and the real estate market to turn around, but key elements include shoring up the unemployment situation as well as our credit markets. How quickly this will happen as well as cleaning up our mortgage situation will determine how fast we come out of the current quagmire.

 As far as the Burbank and San Fernando Valley real estate market, we'll have to see how the local economy fares. We’re still not out of the woods with respect to unemployment and the recessionary back drop. How bank lending reacts to the current financial upheaval will prove to be a pivotal factor in our recovery as well as foreclosure bailout proposals being discussed by congressional leaders.

Burbank Real Estate Monthly Activity Report: 10-2008

Property Type: Residential

The columns for New, Under Contract, and Sold represent the number of listings that went into those statuses during the month. These are updated on the 1st and 15th of each month for the preceding month.

Month to month average sale price from September to October 2008 is up $, year over year, average sale prices are down by $ or %.

Average days on market, year over year are days.

Average square footage is % year over year.

Most notably number of sold properties is down 34% from September 2008 and down 22% from October 2007.

• According to the San Fernando Valley Economic Research Center, foreclosures soared 203 percent from July through September compared to a year earlier. 2,589 local families lost their homes in the market collapse.

• There were 854 foreclosures in the comparable period in 2007.

• The glut of homes on the market pushed down the median price, to $400,000 in September from $620,000 a year ago, down 35.5%. The price fell $21,000 from August levels.

• The median price of an existing, single-family detached home in California during September 2008 was $316,480, a 40.9 percent decrease from the revised $535,760 median for September 2007.

• Statewide, days on market and inventory on hand is down. We are currently at a 6.5 month inventory for California.

• The new home sales report for September points to the possibility that the sector has bottomed. New home sales came in at a better-than-expected annual rate of 464,000, up 2.7 percent on the month. The 464,000 rate is the first back-to-back below 500 rate since the '91 recession. Supplies are coming down and are at 10.4 months, down from 11.4 months in August. The median price, of $218,400, is the lowest in four years.

• Impressive reductions this last month in the foreclosure arena! For the San Fernando Valley, in the $200k-$400k segment (yes, there is plenty of housing out there in the neighborhood of $200k), I saw reductions ranging from several thousand to one hundred thousand dollars! This points to the fact that the banks are wanting to clear out some inventory, maybe some year end house cleaning? At any rate many homes have gone into multiple offer situations as buyers are out in full force.