Pasadena CA Real Estate

In this post, Pasadena California Real Estate blog will reveal the secret and answer the question that every real estate home buyer has been asking recently.

How do I know when the Pasadena real estate market hits bottom?

 

Ladies and gentlmen, the answer is very simple:

There is only one way to know that the real estate market has bottomed out and that is when the real estate prices start going up!

Simple, isn't it?

There's no way, none what so ever, to time the real estate market.  Many have tried and some lucked into buying at the right time at the bottom of the market. 

Take a look at the graph below.  It shows how difficult it is to time the real estate market because it's not consistently linear.

Gary Keller, the author of "The Shift" explains it as the real estate buyers being in the lucky or unlucky zones or purchasing a home in the "safe" zone.

Gary says "You know the market has bottomed out when it starts back up and you know the market has peaked when it starts back down.  The safe zone is where smart people plan to buy an dsell.  Anyone who buys at the top of a real estate market is just unlucky and anyone who buys at the bottom of a market is just lucky."

Gary goes on to say that "people who buy in a buyers' market are the smart ones.  They're buying in the safe zone and living in the area of certainty.   They're not unrealistic and they're not greedy.  They know they can't predict the end of a bust, but they can see when a market has fallen consdierably."

So if you are interested in buying a home in Pasadena and are wondering if the Pasadena market has bottomed out, ask yourself:

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I've been posting monthly real estate market report updates on this site for cities around Pasadena.  One of the key real estate indicators that I refer to is the Market Action Index or MAI.

What is the Market Action Index ?  And, why does the Market Action Indicator matter?

Residential house prices are a function of supply and demand, and market MARKET ACTION INDEX conditions can be characterized by analyzing those factors. 

My research company, Altos Research uses an algorithm to divide a Buyer's Market from a Seller's Market.  The red line at 30 is that line. 

For example in the graph below for Pasadena's real estate market, it has been a COLD, BUYER'S MARKET since end of 2007 with the MAI hovering quite a bit under the balanced market of 30, closer to 15.  Now, this graph is for the entire Pasadena real estate market.  Each zip code within the city has a different MAI.

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Alhambra real estate market metrics are listed below, but I wanted to point out a couple of highlights.

For Alhambra, Single Family Residence homes (SFR), sales prices have risen over the last couple of months to the low $500,000, but the price per square foot of Alhambra homes sold has dropped significantly.  This is usually an indication that buyers are getting more house for their dollar.

Alhambra SFRs are selling on average for 96.34 percent of sales price to list price.  Although, 3 of 15 homes sold over asking and 3 homes sold at full asking price.

It's no surprise that the Alhambra homes that show as expired listings this month were seriously overpriced at $420 per sq. ft. on average.  Sellers are not paying attention to Alhambra real estate market metrics that clearly show that homes are selling around $350 per sq. ft. on average.

The lowest priced home (SFR) in Alhambra is currently listed at $360,000.

The highest priced (SFR) Alhambra home is currently listed at $998,000.

Inventory for condos and townhomes has fallen slightly in the month of July, but Alhambra condos and townhome buyers that have opened escrow each month remain pretty consistent at 10 to 11 homes each month. 

Alhambra Real Estate Market Housting Report - May 2008 - July 2008:

Data compiled from ITEC (Pasadena Foothill Association Multiple Listing Service)

I invite you to request Alhambra's real estate market updated reports by clicking here.  These reports are compiled by Altos Research and the analysis is emailed to you weekly.  I also offer real estate market reports for San Gabriel, San Marino, South Pasadena, Pasadena, Arcadia, Altadena, Monterey Hills and more.  These reports can be ordered at the same time.

If you would like to search for homes in Alhambra, please visit the free home search here on this site.

For a private consultation about buying or selling your home, or if you have other real estate related questions, I'd love to hear from you at 626.627.7107.

Irina :-)

There was a huge increase in new listings of Single Family Residences in July 2008.  The number almost doubled from 77 new home sellers to 140 new home sellers.  The influx of new Pasadena homes for sale had a downward effect on the average SFR sales price and price per square foot.

The least expensive home for sale in Pasadena is listed at $120,000.

The most expensive home for sale in Pasadena is listed at $52,000,000.

Pasadena SFR homes under $412,000 seem to stay on the market the longest about 4 months with homes over that price selling in about 2.5 months.

Residential house prices are a function of supply and demand, and market MARKET ACTION INDEX conditions can be characterized by analyzing those factors.  Come back to this site to watch this index for sustained changes: if the index falls into the Buyer's Market zone for a long period, prices are likely in for a downward correction.

The Market Action Index (MAI) illustrates the balance between supply and demand using a statistical function of the current rate of sale versus current inventory. 

An MAI value greater than 30 typically indicates a "Seller's Market" (a.k.a. "Hot Market") because demand is high enough to quickly gobble up available supply. A hot market will typically cause prices to rise. MAI values below 30 indicate a "Buyer's Market" (a.k.a. "Cold Market") where the inventory of already-listed homes is sufficient to last several months at the current rate of sales. A cold market will typically cause prices to fall.

Pasadena condos actually dropped in the number of available listings to 169 per ITEC. 

Pasadena townhomes also had a reduction in inventory.

Pasadena Real Estate Market Report for May 08 to July 08:

Data compiled from ITEC (Pasadena Foothill Association Multiple Listing Service).

If you are interested in receiving a weekly Pasadena real estate market report with the Market Price Index, you can request the Pasadena Market Real Estate Report here and it will be emailed to you automatically each Monday.  This is a report that I order specifically for the readers of my website from Altos Research who specializes specifically in real estate housing market activity throughout the country. 

I also offer real estate market reports for Alhambra, San Marino, South Pasadena, Monterey Hills (under Los Angeles 90042), Arcadia, Altadena, San Gabriel and more.

If you have additional questions about the state of the Pasadena housing market, please call me at  626-627-7107 .

Irina :-)

San Gabriel real estate market has been holding pretty steady without any major variances over the last few months.  The least expensive home on the market in San Gabriel right now is $299,000 and the most expensive home for sale is $2,195,000.

Interestingly, the number of homes on the market has dropped for both Single Family Residences (SFR) and Townhomes.  This drop is due to more buyers opening escrows in July for SFR and more properties being taken off the market for Townhomes - a possible indication of foreclosures and unsuccessful short sales.

San Gabriel Real Estate Housing Data:

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