Rising prices both lure, curse for housing

By JONATHAN LANSNER, OC Register
2010-04-15

Is serious interest really growing in real estate?

According to a new survey of home shopper psyche by Move.com of 1,000 adults, 17.2 percent of potential homebuyers recently told pollsters they plan to purchase a home in the near future as an investment — triple 5.6 percent in March 2009.

That’s an encouraging trend for home sellers — if they didn’t read the rest of the study. Such as:

•49 percent of all homeowners would buy another home today if they could sell their current home for what they paid for it or more. (Don’t many of us wish …)

•Why sell? Need to lower expenses (25.4 percent), top reason given.

69.1 percent of homeowners who delayed selling say they reduced their daily living expenses in order to pay their mortgage.

One could surmise that these 17.2 percent prospective investors are seeing trends like selling prices on the rise.

For example, DataQuick reports that February’s median selling price was 14 percent above year ago — with San Diego owning the largest regional gain at plus-15.8 percent.

In Orange County, the median was up 12.2 percent as selling prices increased in three-fourths of local ZIP codes last month. Just six of O.C.’s 83 ZIP codes had price gains in March 2009.

However, across SoCal, last month was the 21st in a row to see sales up vs. a year ago. Yet the region’s 20,500 transactions closed in March were still significantly below average. March sales have averaged nearly 25,000 during the past 23 years.

“It’s a reflection of just how grim things got that we’ve now had almost two years of sales gains and we’re still 18 percent below the sales average,” said DataQuick President John Walsh.

Brokers have to be happy, at least.

The total amount spent buying Orange County homes through the broker-controlled multiple listing service rose to nearly $1 billion in February, the Anaheim-based Southern California Multiple Listing Service reported. That’s up 19.5 percent from the previous February, a gain due mainly to this past year’s increase in home prices.

Yet price hikes aren’t totally great news for all.

Orange County was ranked as the fourth priciest place to buy a home in America, according to a list of 207 U.S. regions tracked by the “Paycheck to Paycheck” housing affordability report by the Center for Housing Policy.

This report looks at what income is required to buy with very conservative math. That meanest takes $129,850 of income to comfortably afford the median $435,000 Orange County home. “Needed income” for this chart was, as the CHP put it, “the income required to qualify for a mortgage on the median priced home by assuming a 90 percent loan-to-value ratio — that is, a 10 percent down payment plus the use of private mortgage insurance. Monthly payments are calculated to include loan principal and interest as well as estimated taxes and insurance.”

This same group also questioned the high cost of local rents, ranking Orange County as the nation’s 4th priciest place to rent.

 

Our region-by-region analysis of Orange County homebuying shows sales gain were not universal …

•Mid-county ZIPs saw 10 percent fewer sales in these 24 ZIPs.

Sales in north-inland ZIP codes rose 6 percent from a year ago.

Beach cities’ ZIP codes had 47 percent more sales than a year ago.

South inland’s ZIPs had a 54 percent boost in sales from a year ago.

All told, countywide sales were up 9 percent vs. a year ago.

 

We know distressed properties have been a hot button for home shoppers. But forever?

The hook is that Orange County homebuyers got a 34 percent price discount when they chose a distressed property vs. overall market prices in January, according to First American CoreLogic. That’s the biggest discount in six months.

Still, distressed properties — foreclosed or “REO” homes sold by banks or “short sales” where banks accept proceeds less than the mortgage due — were 35.1 percent of the O.C. sales market in January, a 30.6 percent drop in share vs. a year earlier.

Here’s a sampling of how that tumble occurred

•Total sales averaged $505,218 – 11.1 percent vs. a year earlier.

A. REO sales averaged $386,112 – 11.1 percent vs. a year earlier.

•Short sales averaged $372,642 – -7.0 percent vs. a year earlier.

Nationally, First American found …

Distressed home sales accounted for 29 percent of all sales in the U.S. in January, highest level since April 2009.

Among the largest 25 markets, Riverside had the largest percentage of distressed sales in January (62 percent), followed closely by Las Vegas (59 percent) and Sacramento (58 percent)

Average non-distressed market-sale price in January was $247,700 but the distressed average price was $161,600.

 

Josh Feinman chief economist of DB Advisors in the America, on the national economic picture: “In housing, the worst of the excesses have been corrected, but a considerable overhang remains that may constrain the revival in a sector that has typically been in the vanguard of recoveries.”

http://www.ocregister.com/articles/percent-244324-sales-home.html

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