A total of 20,514 homes were sold in southern California in April of 2009, an increase of 5.2% from the prior month and 31.4% from April 2008. This is the highest number of sales in southern California since April of 2006. Almost all of these were resales, and foreclosure resales accounted for 53.6% of all resales counted. Meanwhile, builders continued to suffer, selling fewer newly constructed homes last month than any April since 1988. Resales rose dramatically in inland markets like Palmdale, Victorville, and Moreno Valley, but remained low in higher-end communities like Beverly Hills and Pacific Palisades. The average monthly mortgage payment for new buyers also continued to drop.
In less encouraging news, a record number of mortgage default notices were filed against California homeowners in the first three months of 2009. 135,431 notices of default were sent between January and March, an 80% rise from the prior quarter. The highest number of defaults was in Riverside, Merced, and San Joaquin counties, while the lowest were in Marin, San Francisco, and San Mateo counties.
first tuesday take: To compare sales with this time last year is to state the obvious: one year ago was the bottom of the volume for real estate sales, from which we are still in an upward bounce. However, the other now well-known fact is that the cascade of real estate owned (REO) properties stationed to hit the market this year will definitely have an adverse affect on property prices in all three tiers of home value. The pricing, in turn, will send the speculators/flippers (currently 1 in 5 buyers) into disarray as they back off to lick their wounds from having bought too soon and maybe, just maybe, allow long-term rental investors back to the market after a ten-year buying hiatus.
In this current small volume state of sales, we are artificially pre-selling Generation Y. Thus, the market is cutting into the positive effect Y-geners would have had in 2013 when they as a group of first time buyers (aged 25 to 34) were scheduled to start arriving to buy homes. Then when the REO pace dissipates, the boomers who are now starting to retire and are holding off selling their homes at current prices (because they can), will start dumping their large empty nests on the market. And just who will be the buyers of those larger, mid-tier properties? By then, migration and immigration will probably be the answer, as California creates good, high-paying jobs once again to pull itself out of yet another real estate slump through population inflation. Let the hordes arrive, sooner than later.
Re: “Southland home sales hot inland, cool on coast; median price dips”, from Dataquick News;
“Golden state mortgage defaults jump to record high”, from Dataquick News