Alhambra Real Estate
Alhambra Homes For Sale - Investing in Real Estates of Alhambra, CA

A Buyer’s Market in Alhambra?
By Lee Lieberg

It feels like a buyer’s market, but is it? Prices have dropped and many homes are staying on the market longer. That sure feels like a buyer’s market but some of the numbers suggest differently.

A buyer’s market is generally considered a market where the demand is lower than the supply and price fall. If demand is stronger than the supply, it is a seller’s market and prices rise.

One school of thought says the average home sells in six months. Therefore a six month supply of inventory is neutral. A three month supply is a seller’s market and a nine month supply is a buyer’s market.

While prices are down from a year ago, we have now had four months since the lowest median price of the year. We certainly could go lower, but that isn’t clear when you look at the numbers.

In Alhambra, 32 single family homes and condominiums sold in the month of July. You have to go back over a year to find a month when more homes sold. For the last twelve months we averaged 21 homes and condos sold each month.

Our current inventory of homes listed for sale is 119. This means that there is less than a six month supply, indicating a seller’s market not a buyer’s market.

The 2008 inventory levels have been about a third lower than they were in 2007. In a buyer’s market one would expect the inventory to increase, not decrease.

If supply is down and prices are down, then the demand must be down. This appears to be the case in many markets, particularly those of first time buyers where obtaining financing is difficult.

The current market is being shaped by the foreclosures and short sales. In markets such as Palmdale and Lancaster, the number of distressed properties has outpaced the number being sold.

Alhambra is a more mature and stable market. There has been an increase in foreclosures and short sales recently, but they are relatively few and being absorbed by the market. In July I counted 12 of the 32 homes that either had been foreclosed or were short sales.

Going forward there are two things to keep an eye on: the number of foreclosures and interest rates. A dramatic increase in foreclosures in Alhambra seems unlikely, but could increase the supply; and interest rates, while anyone’s guess, could shrink the buying power if the cost to borrow were to climb significantly.

If you are buying, prices are down and interest rates are low. This might be as good a buyer’s market as your going to get.
 

*Data was obtained from California MLS Alliance and deemed to be reliable. Lee Lieberg can be contacted at lee.lieberg@dilbeck.com.