Open Forum (8/19- )

Posted by Dave Fratello on Wednesday, August 19th, 2009 at 11:15pm.

The front page of the local fishwrapper carries big news:

Southern California home sales and prices rise in July

Wow, housing crisis ebbing?

We last looked at similar news and how it pertains to MB (or doesn't) almost 3 weeks ago in "MB vs. CA & U.S. Trends," so we won't recap the whole story again.

But here's a speed-reader's guide to the LA Times story today (graph above taken, with credit here, from the LA times), some quotes both optimistic and causes-for-concern:
  • [Data show] a sharp rise in home purchases and an increase in median prices for a third straight month -- suggesting that the two-year decline in home values may finally be over.
  • Lower-priced homes are getting most of the action, with bidding wars for homes listed at $500,000 or less.
  • Listings of homes for sale "at least at the low and mid-level are pretty much empty. There's not a lot of supply," [housing economist Gerd-Ulf] Krueger said.
  • Despite its recent rise, the median price [for LA County] remains at 2002 levels and is 47% below its peak set during several months in 2007.
  • [A] backlog in the foreclosure process ... has reduced the inventory of homes for sale. Thousands of homes are in default but haven't been repossessed because of foreclosure moratoriums. Even homes that have been repossessed by lenders have been slow to be put on the market.
  • In July, nearly 125,000 homes in California were scheduled for foreclosure auctions, nearly double the number during the same month the previous year, according to ForeclosureRadar...
  • Prices could fall further when more foreclosed properties are put on the market, especially if lenders dump a large number of homes at once...
A lot of this news is plainly about a different tier of the market than MB. Tight inventory!?! Half the sales foreclosures?!? We've got different issues here.

On the plus side, MB resales are generally coming in somewhere around 2004-05 prices right now, not 2002, like the countywide median.

There's more in that story today on that upcoming wave of foreclosures – one of the signs we're not through working out the bubble.

We've been hearing more and more about that recently. For instance, 3 weeks ago in this California Association of Realtors press release:
“Although another surge of foreclosures is expected later this year, demand remains strong, so the market may be able to absorb more distressed properties without significantly impacting the median price,” said [C.A.R. Chief Economist Leslie] Appleton-Young.
Right now almost half the homes sold in California are foreclosures – a pretty big chunk of the sales mix. And July's number of foreclosures was double last year's. We're thinking that when this "surge" hits, median prices are still in danger.

But MB is starting to feel very isolated from broader trends regardless. As it has been, more on the plus side, for some time.

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