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Home Sales Activity in South California Jumps 13.8%
by cassy82
Last month, home sales activity in Southern California rose for the very fist time since 2005. The said increase is believed to be the result of the huge discounts being offered for both existing and foreclosure homes. Across this region, home values have plunged 31 percent in the last twelve months.
Compared to the same period last year, home sales volume increased by 13.8 percent. Riverside County leads the pack with a 48.6 percent jump while Los Angeles was not fortunate enough since it posted a 3.2 percent decline in sales activity.
According to local market experts, the considerable jump in sales activity can be attributed to the growing buyer interest especially with the offers of huge discounts floating around everywhere. In addition to this, the large inventories of homes that include foreclosure properties are certainly attracting buyers who will like to enjoy such great home buying opportunities.
Most of the buyers lured in the South California market are those looking to enjoy considerable savings and are more likely to purchase the real estate property for their own use. These buyers are no longer concerned whether or not home prices will further decline since they are buying properties that they will live in and not sell once again for a profit.
Real estate experts are predicting that the current decline in home prices has not yet hit bottom. According to them, it will still be a couple of months before this happens if you take into consideration the still increasing number of foreclosure filings as well as the tightening lending guidelines, which have are discouraging many potential buyers.
On the other hand, the home sales activity decline in Los Angeles County can be due to the relatively smaller inventory of cheap homes for sale. The county is also not among the areas hit hardest by the foreclosure crisis.
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cassy82
Los Angeles, ifornia, United States Minor Outlying Islands
Most RecentMost Recommended Comments (1)
at 09:29 on August 20th, 2008
Sales prices need to be looked at closely. Did the sale include a new mercedes, 50k in upgrades,etc. The reported price drops do not reflect those or the fact the home that was listed for 500k did not sell but the 800k listed home sold for 600k. If all the 800k houses sell for 600k then the average price is 600k up from the 500k. In reality prices dropped but the average increased.
Unit sales also need the same scrutiny. Bulk sales to a non-bank type firm like a hedge fund are included in sale counts because transfer taxes are paid. The bulk sales are not included in price averages because they can span several counties and states. These bulk sales do not take homes off the market. All they do is transfer them to a different entity at 70 to 90 percent discount. Those units are either refinanced to the current occupant at 10 percent below market value or sold a steep discount to double or triple the investment. The latter actually causes the market to fall more which in turn supplies more homes to the hedge funds.
Do not expect this market to turn around soon. Any glimpses of hope are just that.