Price Increases, Fewer Foreclosure Sales Help So Cal Market
The Southern California market continues to recover, as new home sales increased year-over-year, prices increased and foreclosure resales took a smaller share of the market in November, MDA DataQuick said. There were a total of 19,181 new and resale homes sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That’s down 13.3% from October’s 22,132, but up 14.7% from 16,720 sold in November 2008, the San Diego-based company said. It’ the 17th straight month of year-over-year increases for the market. November sales were boosted by an unexpected increase new homes. There were 2,039 new homes sold, the highest number of any month in 2009, and 25.5% higher than the new home sales total of 1,625 in November 2008. MDA DataQuick said the improved new home sales numbers were impacted in part by the creation of the existing homebuyer tax credit, as well as the extension of the first-time homebuyer tax credit, low interest rates and the availability of government-backed mortgages. Foreclosure resales accounted for 39.1% of November existing home sales in the region. That’s the lowest rate since May 2008, when foreclosures accounted for 39.1% and below the market peak of 56.7% in February 2009. “This market is still really lopsided. Foreclosures and short sales are huge factors. There’s still not a lot of discretionary buying and selling outside the more affordable markets,” said MDA DataQuick president John Walsh. “Anybody who can sit tight is doing just that. The market won’t fully rebalance itself until financing becomes available for the higher price ranges,” he added. The median sale price for the region was $285,000, up 1.8% from $280,000 in October and even with November 2008. It’s the first month since September 2007 to not experience a year-over-year decline, but down from the market’s early 2007 peak median of $505,000. Mortgages over $417,000 accounted for 15% of all home purchases, a steady share that’s held since June. Adjustable-rate mortgages (ARMs) accounted for 4.1% of mortgages in November. That’s down significantly from the peak of the housing sector, when ARMs accounted for 47% of mortgages from 2000 to 2005. On the opposite side of the spectrum, Federal Housing Administration (FHA)-backed mortgages accounted for 38.1% of November mortgages, even with October and up from 34.5% a year ago. Just two years ago, FHA loans accounted for only 2.5% of purchase mortgages. Write to Austin Kilgore.