In Southern California, Foreclosures Dominate
Foreclosure resales reached fifty percent of the Southern California housing market during September, a new high-water mark underscoring just how much distress there really is in the Golden State's battered and bruised Southland housing markets. According to San Diego-based MDA DataQuick, a real estate information service, the fifty percent foreclosure resale figure is up from 45.5 percent in August and 12.6 percent one year earlier. At the county level, such foreclosure resales ranged from 36.8 percent of September resales in Orange County to 68.9 percent in Riverside County. In Los Angeles County, foreclosure resales were 39.1 percent of all resales; in San Diego, 47.3 percent; San Bernardino, 63.1 percent and in Ventura County, 44.0 percent. The good news? With foreclosures moving, Southern California home sales shot up by an unprecedented 65 percent last month from the dismal, record lows of a year ago, when a credit crunch slammed the brakes on home financing. September sales also posted a rare gain over August as price cuts lured more buyers, MDA DataQuick said. A total of 20,497 new and resale houses and condos closed escrow in the six-county Southern California market in September, up 5.8 percent from 19,366 in August and up 64.6 percent from 12,455 in Sept. 2007. Last month's sales were the highest for any month since December 2006 and the year-over-year gain was the highest for any month in DataQuick's statistics, which go back to 1988. However, last month's sales were still the second-lowest for any September since 1996 and were 17 percent below the 20-year sales average for that month. (Which means that how you interpret last month's data is absolutely a matter of perspective). MDA DataQuick analysts said that the huge annual sales increase observed in Sept. stems from the extraordinarily weak activity one year ago, when sales were at a record low for that month. The year-ago sales plunged after the credit crunch that struck in August 2007 made "jumbo" mortgages for higher-end homes more expensive and harder to obtain. Sales were already hurting from the subprime mortgage industry meltdown earlier in 2007, which undermined demand for entry-level homes. "The pitifully low September 2007 sales numbers weren't tough to beat," said John Walsh, MDA DataQuick president. "More impressive was that this September's sales volume bucked the seasonal norm and rose above August." "You have to view last month's sales in the proper context," he cautioned. "They represent escrow closings, which reflect purchase decisions made in mid-to-late summer. That was before the dramatic worsening of the nation's economic crisis in recent weeks. Over the next few weeks our sales data will begin to show how the meltdown in financial markets this fall has impacted housing demand." The high level of foreclosure resales helped push the Southland's median sale price down to $308,500 in September, MDA DataQuick said, the lowest since it was $305,000 in May 2003. Last month's median was 6.5 percent lower than $330,000 in August, and 33.2 percent lower than $462,000 in September 2007. For more information, visit http://www.dataquick.com.