SALES AND PRICES ARE MOVING UP. April 2014 median price sky-rocketed 49% above April last year. In 4 months, 2014 median price rose up 20% over same period last year. Sales are down 12% year over year. Arrowhead Woods, is in high gear.
Higher value homes create bracket creep…
Arrowhead Woods sales are rising into higher brackets; up $100,000 to $600,000 rather than topping at $500,000 which has been the case for more than five years.
In Lake Arrowhead, the resort, prices range from $100,000 to $15 million. We do not have homogenous tracts, as Anaheim or Newport, where tracts have similar homes and prices in a narrower range. As a result the median price in Arrowhead Woods can transcend to higher and higher price brackets in an enlarging market. We can have bracket growth that looks like rising prices.
Good news is the sharp decline of foreclosures, mostly under $200,000, though the culprit of the overall 12% decline in sales in 2014, down from 2013.
Consumer confidence is the key to the higher home purchasing activity. A purchase of $519,000 with 20% down qualifies for a conforming loan capping at $417,000. As sales climb above $519,000, we see this as an affirmation that buyers are confident of the future economy and are willing to buy more expensive homes by contracting for a jumbo loan – at a higher loan rate. The second option is to put up a larger down payment of 25% – 30%… again affirming confidence.
January – April Distribution of Sales in 2013 – 2014.
85% of all sales in 4 months 2014, under $600,000.