ARCADIA NEW HOMES – 2017 SALES PACE
STEADY –HIGH INVENTORY – STRONG PIPELINE BUT …..
The pace of Arcadia (detached) new
home sales held steady in 2017.
In 2014, the MLS reported 61 new
Arcadia homes sold, 5.0 sales per month.
2015 was the “peak” year for Arcadia new (detached) home sales. In 2015
the MLS reported 65 new Arcadia homes sold, 5.4 sales per month. In 2016 sales
declined 14 percent. Sales totaled 56, 4.7 sales per month. New home 2017 sales
totaled 53, 4.4 per month, slightly less than 2016’s.
New (detached) home inventory remains
at a high level. Currently there are forty-three homes listed for sale on the MLS, five of
which are in escrow. Those forty-three homes translate to a ten month inventory
given recent new home sale velocity.
Even with the high inventory the pace
of new construction should be steady (FOR AWHILE). The Arcadia Building Department reported 112
single family home (detached) building permits were issued in 2016. In 2017
seventy-three (73) SFR building permits were issued, a thirty-five percent
decrease from 2016. THINGS ARE CHANGING. During the 4th quarter
2017, only fourteen (14) permits were issued. This is a significant decline. It is reported Arcadia demo and building
permit applications/requests are “way down”. We should see less SFR
construction and construction starts in
coming months.
During the last four years, Arcadia
new home prices on a per sq. ft. basis have very moderately declined. In 2014
the average new home price was $3,347625 ($604/sq.ft.); in 2015 the average was
$3,919,351 ($587/sq.ft.); in 2016 $3,383,432 ($589/sq/ ft.) and in 2017,
$3,361,422 ($574/sq. ft.)
Many factors may contribute to the
very moderate decline in new and upper end Arcadia home sales. Chinese
individuals have always faced Chinese government constraints to overseas
investments. For years wealthy Chinese have figured out ways to get around
these constraints – a kind of “cat and mouse’ game. The Chinese
government has been tightening its monetary policy and further increasing
restrictions to slow outbound capital flows. It has had an impact. Chinese home
buyers have extended their reach/search
beyond Arcadia/San Gabriel Valley to other Southern Cal locals and US cities in the last few years. Many of these cities
are viewed as more affordable. Seattle,
Portland, Bay Area, Dallas and Florida cities are generating more Chinese
interest and investment.
Credit Suisse estimates there are 1.6
million U.S. dollar millionaires in China. These millionaires will continue to
figure out how to invest in overseas markets in order to diversify assets and
hedge against potential Chinese economic and political uncertainties.
Arcadia/San Gabriel Valley with so many attributes will continue to be a
primary destination for these millionaires’ capital.
