Statewide, 41,280 homes were sold in October, up 2.6% from September and down 2.4% from one year ago. 22,132 of these homes were sold in Southern California (So Cal), up 2.8% from September and similarly up 2.8% from one year ago.
The statewide median price paid for the phantom median-priced home was $257,000, up 2.4% from September and down 7.6% from one year ago. The So Cal median price was $280,000, up 1.8% from its September price of $275,000, but still down 6.7% from one year ago. These median dollar amounts and percentages represent no specific home, except by mere coincidence.
Of the homes sold statewide, 41.2% were foreclosed real estate owned (REO) properties, down from 52.4% one year ago when REO properties were in greater abundance. Foreclosed properties accounted for 40.6% of So Cal resale activity. Some mortgage principal payments, taxes and insurance will be less than rent for many tenants, as they were prior to the mid-1970s before a home changed from being a nest to an investment.
The typical mortgage payment a homebuyer committed himself to paying was $1,097 statewide and $1,196 in So Cal. The So Cal typical mortgage payment is down from the $1,470 in October of 2008.
Foreclosure activity has slowed in recent months though is still comparatively high by historical standards. The size of down payments is stable, financing with multiple mortgages is low and the volume of investor activity is above average in some California markets.
first tuesday take: Many of these indicators hint at a modest improvement. However, it is important to take these indicators with a grain of salt: unemployment continues to erode the confidence of potential buyers, scaring them from the market until they feel confident in their long-term employment options. An increase in speculator activity bolsters sales now but sets the stage for a weaker market in future. Additionally, many positive indicators are not the result of a return to the market fundamentals we need, but rather the unnatural effects of aggressive government intervention. At present, these promising signs are not indicative of a real, on-going recovery – but they are a pretty mirage.
Re: “California October Home Sales,” from MDA DataQuick.
Still scary numbers. Nothing like a little bit of optimism to grease the wheels. The federal homebuying tax credit is certainly providing some momentum. The major reset of adjustable mortgages is scheduled to be at the end of this year, so we can most likely anticipate a wave of foreclosures next year and a potential bottom out at the end of 2010, however the Fannie Mae sale lease-back program for a deed-in-lieu could create a softer prolonged landing; hard to say though without a crystal ball.
LoanModDIY.org
“Now for brokers and agents.”