In a post last week about Westside/South Bay sales activity, I stated market activity was significantly stronger compared to February 2009. Today, The Los Angeles Times took it one step further proclaiming a 10% rise in the median sale price compared to February 2009. Below is a cliff notes guide to the full article.
In February 2009, foreclosure sales as a percentage of the Southland’s resale market hit a record of 56.7%, dragging down prices. Though foreclosure sales have ticked up slightly, they accounted for 42.3% of the market last month, well below the high.
“Because of that change in mix we are going to get median prices that would be year-over-year positive in double digits,” said Esmael Adibi, director of the Anderson Center for Economic Research at Chapman University.
Adibi said the key point to get across to sellers, mainly, is that the increase in sales of higher-end homes may be skewing the median numbers and distorting what other homes may really be worth. He expects prices for more expensive homes to fall again.
Though more higher-end homes were sold, much of the buying activity still remains in the low end.
Southern California’s housing recovery last year was spurred by a very active low-end market as investors with cash snapped up cheap foreclosure properties and first-time buyers with government-insured financing also stepped in.
Southern California’s market is not likely to return to full health until jumbo loans make up a larger share of the market, experts said.
With sales of cheap foreclosure properties becoming increasingly competitive, real estate agents said inventory on the low end has now grown tight — even though many homeowners in California continue to fall behind on their house payments.
Glenn Kelman, chief executive of online brokerage RedFin, said he was “bullish” on California’s prospects.
“California, right now, is its own market,” he said. “It started improving ahead of everyone else last winter . . . and I am not sure there is going to be another dip because there is so much demand.”