Buyers: About 1/4 to 1/3 of current home sales appear to be in some type of distressed situation (i.e. foreclosure, bank-owned, short-sale). And in some areas of the county the ratio for distressed sales can be even higher. These areas are predominantly in the south and east county and the Route 78 corridor due to many of the problem type loans made there. I believe these deals are directly related to our sales numbers rising and will inevitably bring us closer to a stabilized market. Multiple offers are becoming much more common, as homes that have been priced too low are frequently bid up and end up selling at market value. Buyers, this is your time to aggressively secure a home that is priced well with a low interest rate. You can view all homes for sale, including foreclosures, online at SanDiegobythesea.com If you know anyone who is thinking about buying, please let me know how I may be of assistance.
Sellers: Currently, we have roughly a six-month supply of detached homes to sell countywide, but with our current sales rates, this number may continue to decline. When selling a property in this market it is now very common to find yourself competing with banks and/or other lenders that are also selling a property down the street or even next door to you. I must stress the importance of realistically pricing your property from the beginning and making sure your property’s strengths are played up as much as possible. In this declining market I believe it is also important to understand that when you get your first offer close to your asking price, it’s easy to hope that future offers will exceed it, but in many instances in this market, subsequent offers are often for less. Visit SanDiegobythesea.com to see how we can sell your property. If you know anyone who is thinking about selling, please let me know how I may be of assistance.
Home sales in state soar as prices plunge
San Francisco Chronicle - Tuesday, August 26, 2008
California home sales surged last month even while prices plunged a record amount, as buyers snapped up bargains among the state's hundreds of thousands of foreclosed and distressed properties, according to an industry trade group.
The number of existing, single-family houses that traded hands in July leaped an estimated 43.4 percent from a year ago, the California Association of Realtors reported. The median price, however, dropped 40.3 percent to $350,760, the biggest decline since the Realtors began tracking the market.
In the Bay Area, sales increased 6.7 percent, and the median sank 21.2 percent to $663,190.
"We are seeing a robust response to improved affordability," the Realtors' Chief Economist Leslie Appleton-Young said. "But obviously the $64,000 question is when will we be at the bottom? I don't think we'll see that this year."
If the trend continues, it will whittle down for-sale inventories and gradually bolster prices, some industry observers say.
"Of course, we'll have to watch it, but that eventually would help to (drive) price recoveries," said Esmael Adibi, director of the Anderson Center for Economic Research at Chapman University in Orange. "This is the first step toward recovery."
He stressed, however, that it's just an initial step in a long trek.
Additional waves of foreclosures are likely, because thousands of alternative-documentation loans and other exotic mortgages are scheduled to reset to higher monthly payments in the coming months, he said. In addition, sales haven't increased enough yet to substantially reduce the high inventory across the state.
There were 124,487 active listings in California last month, down 5.4 percent from 131,569 a year ago, according to the trade group's member organizations.
Adibi doesn't expect the market to stabilize for at least another year.
Ken Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at UC Berkeley, had a more bearish take on Monday's numbers.
"It doesn't reflect a recovering housing market; it reflects a broken housing market," he said. "It's a reflection of the fact that foreclosed homes are being liquidated at very low prices."
Indeed, San Diego research firm MDA DataQuick reported that 44.8 percent of all the transactions in July were foreclosure resales, up from 7.6 percent a year ago. The trade group didn't provide a statewide figure, but Appleton-Young said it exceeded 50 percent in certain areas.
Rosen believes that investors, not actual intended occupants, are buying up many if not most of the distressed properties in the hardest hit areas. That will do little to stabilize the markets in those areas, especially if prices fall further and foreclosures continue to climb, he said.
He did note, however, that the price declines reported by the Realtors and others are overstating the extent of the problem for average homeowners. He said the significant numbers of foreclosure resales in outlying areas such as eastern Contra Costa County and throughout the Central Valley are dragging down the aggregate figures for the Bay Area and state. The actual price decline in core urban regions is closer to 10 or 15 percent, he said.
It's the fourth consecutive month of statewide sales volume gains recorded by the trade group, which collects data from more than 90 Realtors' organizations. The numbers contrasted sharply with those reported last week by MDA DataQuick. The research firm - which records all residential sales, not just existing, single-family homes handled by Realtors - said statewide sales climbed only 12.3 percent from a year ago.
Still, both sets of figures are moving in the same direction - more sales, lower prices.
California July 2008 Home Sales
DataQuick Information Systems - August 20, 2008
A total of 39,507 new and resale houses and condos were sold statewide last month. That was up 12.2 percent from 35,202 in June and up 12.3 percent from 35,185 for July last year. While below the 47,756 average for the last 21 Julys, last month's sales count was off the record low sales level which the market went into last September.
Of the homes sold in June, 44.8 percent were foreclosure resales, up from a revised 42.5 percent in June and 7.6 percent in July a year ago.
The median price paid for a home last month was $318,000, down 3.0 percent from $328,000 for the month before, and down 33.5 percent from $478,000 for July a year ago. Around half the drop in median is due to depreciation, the other half due to shifts in the types of homes selling, and how those homes are financed.
The typical mortgage payment that home buyers committed themselves to paying last month was $1,501. That was down from $1,543 in June, and down from $2,316 for July a year ago. Adjusted for inflation, mortgage payments are back to where they were in early 2002. They are 27.8 percent below the spring 1989 peak of the prior real estate cycle. They are 41.7 percent below the current cycle's peak in June 2006.
MDA DataQuick, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates, monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts. The numbers cover all sales, new and resale, houses and condos.
Indicators of market distress continue to move in different directions. Foreclosure activity is at record levels, financing with adjustable-rate mortgages is near an all-time low. Down payment sizes and flipping rates are stable, non-owner occupied buying activity is flat, DataQuick reported.
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