One of the agents in our offices, Chris Clayton, attended the conference held by the California Association of REALTORs. She took some interesting notes on statistics gathered in part by Leslie Appleton Young, the associations’ chief economist, which I’ve summarized for you.
The number of sales this year has fallen about 10% from 2009, but is projected to increase mildly next year. However, the median price has risen about 11% statewide this year and may increase by 2-3% next year to about $312,000. About 64% of Californians can afford to buy an entry priced home, compared to about 78% nationally.
Currently, there is a 6 month supply of inventory – unsold homes – which represents a normal balanced market. However, there is a 10 month supply of homes priced over $1 million, compared to a 4 month supply of homes priced under $300,000.
In aggregate, about 1 out of 3 home sales in California was due to distress, short sale, or foreclosure. Bank or corporate owned homes, repossessed after foreclosure, are called REOs. The sellers of these REOs are placing them on the market for sale in a strategic manner so as not to flood the market. Ironically, this strategic sales strategy has created increased demand for foreclosed homes, because there isn’t enough inventory for buyers to choose from. Statewide, over half of REO sales are getting multiple offers.
The number of short sales is expected to rise faster than REO sales, representing lenders’ increased willingness to negotiate sales below the outstanding loan balance, avoiding the costs of foreclosure. The number of new borrowers getting notices of default has fallen 38% compared to last year statewide.
Challenges include the unpredictable outcome of the latest foreclosure moratorium and employment. This year, cash buyers represent nearly one in four buyers, as investors see real estate as a better investment compared to their alternatives.
Here is a link to the video: http://videos.car.org/mediavault.html?menuID=7&flvID=0