The Bloomberg News posted an article on October 14, 2012 that shows promise for the California housing market and it echo’s what I see as a local Realtor.
SAN FRANCISCO — California, the state that led the nation into the housing boom and bust with some of the most reckless subprime mortgage lending, is now leading the way out.
A plunge in new defaults in California helped push U.S. foreclosure filings to the lowest level in almost five years, according to RealtyTrac Inc., a seller of home-loan data. Across the country, 531,576 properties received notices of default, auction or repossession in the third quarter, down 13 percent from a year earlier and the lowest since 2007. One in every 248 households got a filing, RealyTrac said.
California, the birthplace of subprime mortgage lending, saw an explosion of foreclosures thanks to such industry innovations as “no-doc” loans that required no proof of income. The state’s recovery is mirrored by U.S. home values that rose 1.2 percent in July from a year earlier, according to the S&P/Case Shiller index of property prices in 20 major cities. It was the second straight 12-month advance and the biggest jump for the real estate gauge since August 2010.
“We’re starting to see improvement in some of the hardest hit areas, strong demand, competitive bidding on properties and rising prices,” Sean O’Toole, chief executive officer of ForeclosureRadar.com, which tracks sales of foreclosed properties, said in a telephone interview.
The gains are moving in tandem with foreclosure declines as lenders control the flow of bank-owned homes that come to market, crimping inventory and pushing up prices, said Daren Blomquist of Irvine, Calif.-based RealtyTrac.
Initial filings in September fell in 31 states, led by California, the most-populous U.S. state, which dropped to a 69- month low. Defaults dropped 45 percent from a year earlier, 34 percent in Arizona, 22 percent in Michigan and 21 percent in Georgia, RealtyTrac said.
Home sales in California’s biggest population centers climbed in August to the highest level since 2006, according to real estate research firm DataQuick. Median house and condominium prices in six Southern California counties jumped 11 percent from a year earlier to $309,000, while values in nine counties in the San Francisco Bay Area gained 11 percent to $410,000, the San Diego-based company said.
California home sales probably will increase 1.3 percent to 530,000 units in 2013 for the third consecutive year of gains, the Los Angeles-based Realtors group forecasts. Estimated sales of 523,300 in 2012 would represent a 5.1 percent jump from 2011.
“Pent-up demand and first-time buyers will compete with investors and all-cash offers on lower-priced properties, while multiple offers and aggressive bidding will continue to be the norm in mid- to upper-price range homes,” according to Appleton-Young’s forecast.
If you are on the fence about buying or selling a home, make sure you contact your local Realtor and know what is happening in your area. Don’t let the market pass you by.