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Tuesday, Mar 5, 2024

Signs of Stabilization in Home Prices

First time homebuyers and investors are snatching up an increasing number of homes in the San Fernando Valley, according to local real estate pros, marking what could be the stabilization of home prices in the median and lower category. Year-over-year home sales continued a seven month increase in March. Sales were up 60.4 percent over March 2008. New and existing home sales were up 29.8 percent compared to February. Sales were strongest in the central and north Valley, according to the San Fernando Valley Economic Research Center. The median price of a single-family detached home was $347,500 in March, slightly down from $350,000 in February, but 30.5 percent less than a year ago. And sales in the $500,000-plus housing market remained sluggish. April numbers haven? been released yet. ?edian priced homes and less appear to have hit the floor,?says Jim Link, executive vice president of the Southland Regional Association of Realtors. ?hose are the properties causing the 60-plus percent increase in sales. And with median prices starting to firm up, we will likely start seeing an inching-up from month-to-month.? Southland Regional Association of Realtors publishes its own monthly numbers. Link said their March numbers are slightly different from those of the San Fernando Valley Economic Research Center, but indicate the same trends. First-time and median income buyers who were priced out of the market when median Valley home prices were in the $500,000 range are fueling demand, says Link. Investors are also jumping back in the market and buying homes and condos for rental properties. Sellers are receiving multiple offers on homes. And inventory for median and less priced homes is 4.5 months compared to eight months a year ago. FHA mortgages are popular products. And first time homebuyers can tap into a tax credit totaling 10 percent of the purchase price of the home, with a maximum of $8,000, if they purchase between Jan. 2009 and Nov. 30, 2009. ?n median priced homes, that are priced right, it? not uncommon to see 20 offers on a property,?said Jim Ezell, realtor for Park Regency Real Estate. Some offers from investors are all cash. Mortgage rates are also at a low, but borrowers need to be credit worthy. There? some movement in the $500,000-plus category. ?n the upper price range some sellers are realizing that they need to deal with the market reality,?said Ezell. ?ome prices aren? going to jump immediately, so they?e making the move anyway.? Notices of Default were up 63.4 percent over March 2008 and 22.9 percent from February. Foreclosures were down 23.8 percent from March 2008 and down 34.6 from February. The number of homes being auctioned in San Fernando Valley is ?bsolutely up,?says Claudia Collins, escrow officer with American Trust Escrow in Los Angeles. She sees anywhere from 75 to 100 auctioned properties in the Valley go through escrow per month. ?nd that? just what we see,?says Collins. ?here must be a lot more.? Many are fetching auction prices that are less than half of the home? appraised value. Investors are snatching up more than half of these deals with cash. And Wells Fargo is providing financing for many of the sales, she says. Link says foreclosures will continue to have an effect on the market, with many people losing their jobs and another round of subprime mortgages kicking into higher interest rates. It takes a few months for properties to go through foreclosure from the time of a Notice of Default. Lenders list foreclosed properties with an agent. And Link says there are some ?hort sales?happening, where the lender accepts a sales price less than what is owed on the mortgage. ?e don? anticipate foreclosures to go anywhere soon,?says Link.

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