This last month, the percentage of foreclosed homes that made up the market accounted for 24.5%. This number is still relatively high; however, it is drastically lower than the highest percentage back in February 2009 which was 56.7% according to author, Alejandro Lazo, from LA Times.
The new data from DataQuick reported that the sales in the region last month were up 7.5% and the median home price increased by 5.3% in comparison to the same month last year.
Now, why are we seeing an increase in home prices? The real estate market is an extremely competitive market right now. Interest rates are at historic lows as well as home prices.
With those two combinations, we always discuss how that makes up a buyers’ market. It is truly in favor of buyers right now and many are taking advantage. Many homes are receiving multiple offers which are helping to increase the value of homes.
Indicators all point towards an improved housing market with fewer foreclosures.
In yesterday’s post, we even discussed how Fannie Mae is implementing new programs to help homeowners avoid foreclosure to ensure fewer hit the market.
According to the LA Times article, Alejandro Lazo stated, “California has a much more streamlined way of dealing with foreclosures as it does not require a court order for a home to be repossessed by a lender. That distinction has helped California…bounce back from the mortgage meltdown better than other hard hit states like Florida.”
Overall, we are seeing positive signs as fewer foreclosures are making up the resales in the real estate market. In the Southland we have also seen an increase in median home prices slightly. These are good signs towards improvement, and hoping the trend continues.
When comparing April 2011 sales results to this April’s sales, our market performed much better. This is all good news and signs that we are heading in a direction of recovery.
According to Los Angeles Times news, “A total of 38,241 newly built and previously owned houses, town homes, and condominiums sold state wide in April. That was up 2% from March and up 8.6% from April 2011.”
The article also gives statistics of the sales percentage of foreclosed homes in California. In April last month, foreclosed homes made up 30.3% of the resale of homes. This was a decrease of 2.5 points from March 2012 which was 32.8%, and a decrease of 6.1 points from April of 2011 which was 36.4%.
As far as short sales, those are decreasing as well. In April 2012, short sales accounted for 18.3% of home sales, which was down in comparison to March 2012 which was 19.1%. However, these statistics reflect an increase in relation to April 2011, which short sales only accounted for 16.9% of home sales.
Lastly, reports state that foreclosure activity decreased last month to the lowest levels we have seen since the credit crisis began in 2007.
Now these are all signs that our market is recovering slowly and showing more improvement each month. As always, time will tell if the trend continues.
Recent studies have shown that our current real estate market has the lowest priced homes in over 10 years.
This market definitely took a hit, but it looks likes values may slightly increase this upcoming year.
After looking at data for Southern California areas, here are some forecasts for this upcoming year for real estate prices:
Riverside Area 2nd Quarter 2011 – 2nd Quarter 2012 -14.8%
Riverside Area 2nd Quarter 2012 – 2nd Quarter 2013 +5.9%
Median Home Price: $180,000
Los Angeles Area 2nd Quarter 2011 – 2nd Quarter 2012 -6.8%
Los Angeles Area 2nd Quarter 2012 – 2nd Quarter 2013 +2.4%
Median Home Price: $343,000
San Diego Area 2nd Quarter 2011 – 2nd Quarter 2012 -4.8%
San Diego Area 2nd Quarter 2012 – 2nd Quarter 2013 +2.9%
Median Home Price: $375,000
Orange County Area 2nd Quarter 2011 – 2nd Quarter 2012 -7.4%
Orange County Area 2nd Quarter 2012 – 2nd Quarter 2013 +4.5%
Median Home Price: $515,000
This forecast predicts that after the second quarter this year we will be able to see an increase in home prices finally. Homebuyers should definitely take advantage of this market right now and buy while the prices are at record lows in over 10 years.