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Kendyl Young's Blog

By Kendyl Young | Agent in Glendale, CA

La Cañada Flintridge Home Values Report, October 2011

It is time for the La Cañada Flintridge Home Values Report for October, 2011.

Inventory vs. Sales Activity

Inventory continues it's downward trend.  At just 78 homes on the market for sale, we are seeing the lowest inventory in 15 months and considerably lower than inventory levels of last year.  Sales have also dropped significantly starting in August.

There are two reasons for this- One, our housing market is strongly influenced by the school calendar and, two, the "super jumbo" financing limits dropped recently from $729,000 to $625,000.  Buyers for an entry level home today either have to come up with more down payment or pay higher interest rates.

The number of homes entering escrow has also dropped significantly- only 4 homes went under contract in September and just 17 in October.   New listings take a dive and 30 days later the number of new sales also take a dive.  New listings go up and 30 days later the number of new sales also goes up.

Lesson- Do not assume your home will sell because there are no other homes on the market in your price range.  The buyers will wait for new listings rather than make an offer on old or stale listings.

The fall off on new sales means potential for a softening in prices in the first quarter of 2012 because prices are often influenced by our...

Months Supply of Inventory (MSI)

Again, the school schedule seems to rule everything and June and July saw a lot of homes closing escrow- sucking up all of the available inventory and bringing our MSI down.  Since then, however, our MSI has been on the rise. We are now at six months inventory which is close to a Buyer's market where prices would trend down.

Where are prices now?

Average price per square foot is a good measurement of price trends because it evens out factors such as size and price range.   It is unclear if prices are really doing much of anything, right now.  Our average price per square foot is about 8% lower than this time last year- this is actually quite stable.

But, remember- it looks like our inventory is about to rise due to a softening in sales.  This will have a downward pressure on price. In addition there is....

The Shadow Inventory

Longtime readers know I sound the alarm bells on shadow inventory every few months.  The term refers to the number of homes that are in distress but not yet available for sale to new owners.

You would think that an affluent area like La Cañada Flintridge would not be affected by Shadow Inventory, but you would be wrong.  In fact, the number of homes in the Shadow Inventory is abuot 2/3 of our total inventory for sale.  Said another way, when these homes finally hit the market inventory could increase by 60%.

Any guesses on what that would do to our prices?

Kendyl Young blogs daily at www.KendylsOpenHouse.com.  and she covers Glendale Home Values,  La Canada Flintridge Home Values and  La Crescenta Home Values.  You call or text her at 818-396-7588 or email kendyl@kendylyoung.com.  Amusing tweets; @kendyl

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