SoCal, Housing Bottom is Near, If Not Here

I just got off my Mini Lab Webinar and WOW… just as I told my clients… not only will housing bottom by summer… but it has already started in Southern California! 

Just released today, the median price of a home in the six combined Southern California counties was unchanged in February according to figures published by DataQuick. It was the first time in 10 months that the Southern California median home price did not decline.

In San Bernardino County the median home price dropped from $162,000 in January to $153,000, down more than 47 percent from a year earlier.

Home prices in this two-county area may be much closer to bottom, if not already there. The sharp increase in buyer demand driven by much improved affordability is causing a rebound in home sales that ultimately will halt price declines, especially if new mortgage modification programs launched by the Obama administration prevent another wave of foreclosed houses from hitting the market.

The problem is that the supply of foreclosures has been overwhelming demand, causing prices to keep going down. I think we are very close to the bottom in price and if any of the policies of Obama work, we are at the bottom.

Chapman University Economist Esmael Adibi predicted that drops in median home prices in the two counties "are going to be smaller and smaller."  Adibi said he wouldn't be surprised to see a month-to-month price increases by summer.

In Riverside County, 3,420 homes sold last month, a more-than 59 percent increase from a year earlier, and San Bernardino County posted 2,324 sales, up more than 87 percent from the previous February. In Southern California, the two counties had the most dramatic year-to-year percentage sales gain, driven by bargain hunters.

The result of combining record low mortgage rates and the sharp decline in home prices in Southern California is giving home buyers a great deal of affordability that they haven't had for over 30 years.

The typical monthly mortgage payment that Southland buyers committed themselves to paying was $1,090 last month, down from $1,081 for the previous month, and down from a revised $1,940 for February year ago. Adjusted for inflation, current payments were 49.9 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They were 58.9 percent below the current cycle's peak in July 2007.

Foreclosure activity is off its 2008 peak but remains at historically high levels, while financing with adjustable-rate mortgages is at an all-time low, as is financing with multiple mortgages. Down payment sizes and flipping rates are stable, and non-owner occupied buying activity is above-average in some markets, DataQuick reported.

Leslie Appleton-Young, chief economist of the California Association of Realtors, said, "You are seeing a very strong recovery in sales activity, especially in areas where prices have fallen the most." One sign of price firming, Appleton-Young said, are multiple offers for the most affordable homes.

So folks, if you were even thinking about waiting to get your once in a lifetime deals "until later"… you are making a big mistake. My projection of a housing market bottom by summer is sounding more and more like I was too conservative. I would suggest you work fast and hard at perfecting your foreclosure buying skills NOW so you can get your deals bought now in time to sell them this summer to your flock of buyers who want your deals!

I hope you call Jim or Andy asap at 800-310-7730 x2 and find a way to get to my offices for 3 days NOW before you kick yourself for waiting. More Here.

Tagged as: california, foreclosures, home sales, housing bottom, median home price, mortgage rates, southern california