Southern California’s median home price paid in April was $285,000, the same as in March, and up 15.4 percent from $247,000 for April 2009, which was the low point of the current cycle. The year-over-year increase was the sixth in a row, following 27 months of year-over-year decline. (Find out how to make profits in this market for FREE Here.)
April’s year-over-year gain in the median sale price was partly a reflection of more sales occurring in costlier coastal markets, and fewer in the lower-cost inland areas. A year ago, the two most affordable counties – Riverside and San Bernardino – accounted for 37 percent of total sales, while last month they represented 33.8 percent.
Last month 19.3 percent of all sales were for $500,000 or more, compared with 14.8 percent a year ago. Viewed a different way, zip codes in the top one-third of the Southland housing market, based on historical prices, accounted for 28.6 percent of existing single-family house sales last month, compared with 23.2 percent a year ago. Over the past decade, those high-end areas have contributed a monthly average of 33.4 percent of all sales.
High-end sales would be stronger, and the overall market recovery more robust, if two key forms of financing were easier to obtain: Adjustable-rate (ARMs) and “jumbo” loans. Both have become much more difficult to obtain since the August 2007 credit crisis.
However, sales of new and resale homes in So California totaled was down 0.9 percent from March, and down 1.0 percent for April 2009. It’s possible that a significant number of sales that would otherwise have closed escrow in April were delayed until May as buyers tried to take advantage of new $10,000 state tax credits effective May 1. In addition, those who rushed to sign a sales contract last month before the April 30 deadline for a federal home buyer tax credit would likely close escrow in May or June.
Absentee buyers – mostly investors and some second-home purchasers – bought 22.5 percent of the homes sold in April, paying a median $201,000. Buyers who appeared to have paid all cash – meaning there was no indication that a corresponding purchase loan was recorded – accounted for 27.7 percent of April sales, paying a median $200,000. In March cash sales were a revised 27.9 percent. The 23-year monthly average for Southland homes purchased with cash is 14.0 percent.
The “flipping” of homes has also trended higher over the past year. Last month the percentage of Southland homes flipped – bought and re-sold – within a three-week to six-month period was 3.4 percent, while a year ago it was 1.3 percent. Last month it varied from as little as 2.7 percent in Riverside County to as much as 3.8 percent in Los Angeles County.
Indicators of market distress continue to move in different directions. Foreclosure activity remains high by historical standards but is lower than peak levels reached over the last two years. Financing with multiple mortgages is low, down payment sizes are stable, and non-owner occupied buying is above-average, MDA DataQuick reported. Read the Full Report Here.
There are tons of opportunities to find foreclosures to buy. The question is ‘at what price’? You must be careful to know exactly WHAT a deal is, so that you do not over pay for your properties. And you must buy your homes below CURRENT market value (at least 30% discount) so you can lock in your profits when you buy, and bank them when you sell.
Learn more about how to do this, along with how to find money for your deals in my FREE LIVE New Foreclosure Investor Webinar on June 9th, 6pm Pacific. You must register in advance to secure a spot. Read the Details HERE.
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