Tuesday, February 15, 2011

Foreclosures sink California home prices

The same thing is happening in California, most of the sales were distressed and it is killing the average home price.

A surge in transactions involving "distressed properties" boosted the real estate market in the Golden State in January -- with an increase in sales for the third month in a row, at least adjusting for seasonal trends, the California Association of Realtors reported today.
At the same time, median prices statewide and in many regions throughout California were down in January, both month over month and from the year before. Statewide, the median single-family home price was $278,900, down 8.6 percent from December and down 2 percent from January 2010.
"Although prices typically fall seasonally in January and February of each year, the decline in the median price can primarily be attributed to the after effects of last fall's foreclosure moratoria," Leslie Appleton-Young, the group's chief economist and vice president, said in a news release.
"More distressed properties are coming on to the market, which led to an uptick in sales of distressed properties during January," Appleton-Young said. "We expect this trend to continue as lenders expedite the disposition of these properties."
The Realtors' data is based on transactions recorded in regional multiple listing services. By contrast, the monthly Silicon Valley real estate numbers reported by San Diego tracking firm MDA DataQuick are based on data gathered from county governments.
According to the Realtors' report, home values here in the Valley of Heart's Delight are holding up better than throughout the state. The median price in Santa Clara County last month was $530,000, down 5.5 percent from December, but up 1 percent from January 2010.
Southern California real estate: DataQuick's report on home sales in Silicon Valley and throughout the Bay Area is expected later this week. Today, however, DataQuick reported last month was theslowest January for Southern California in three years -- and the second-slowest in 15 years.
"Sales were lousy, but many investors and others looking for bargains stayed active," DataQuick President John Walsh said in a news release. "They kept working the distress-heavy, lower-cost markets through the holidays, which translated into a relatively high level of investor and cash deals closing last month."
In past, Walsh said, that explained a 6.9 percent drop from December in the median price to $270,000. That number was down 0.6 percent from January 2010. It included sales in Los Angeles, Orange, San Diego, Riverside, San Bernardino and Ventura counties.
Homebuilders: Their confidence remained weak this month -- at a level 16 for the fourth month in a row, according to the National Association of Home Builders/Wells Fargo Housing Market Index released today. (A number over 50 would indicate good sales conditions.)
"While builders are starting to see more interest among potential homebuyers, we are also dealing with a multitude of challenges, including competition from foreclosure properties," association Chairman Bob Nielsen, a Reno homebuilder, said in a news release.

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