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Distressed homes lead March sales
County hits low for the month; median value falls 24 percent
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More from BusinessSmacked by record foreclosures that continue to drag down home values, the housing market remained "sobering" last month.
"I think distressed sales are causing virtually all of the decline," said Bill Watkins, executive director of the UC Santa Barbara Economic Forecast Project.
Sales of new and existing homes and condominiums in Ventura County plunged to 549 in March, down 45 percent from 999 a year ago, DataQuick Information Systems reported Tuesday. It was a record low for the month.
Nearly 37 percent of the transactions were sold after being foreclosed on at some point in the previous year, said Andrew LePage, a DataQuick analyst. That represents a huge shift when compared with 4.4 percent foreclosure resales the year before in Ventura County.
Foreclosure filings, including default notices, auction sale notices and bank repossessions, have soared in Ventura County, with 2,415 recorded in the first quarter, up from 1,514 last year and 366 filings in 2006, according to Irvine-based RealtyTrac.
"When you see affordable resales accounting for half or more activity, you almost always see that those communities have suffered more," tugging the median down by 5 to 10 percent in those neighborhoods, Le-Page said.
Ventura County's median sales price was $430,000 in March, a 24.1 percent decline from $566,750 a year ago, according to DataQuick, a La Jolla-based real estate information service. The median has retreated to a level last seen in February 2004. The median is the midpoint, where half the homes sold for more and half for less.
Foreclosures or properties sold by developers represent a large portion of sales, Watkins said. Low unemployment rates signal that most people have jobs, which indicates that there is less pressure to sell, he added.
Some sellers say they're not being forced out, but that it's simply time to move on.
Dana Snider listed her two-bedroom, two-and-half-bath Moorpark condominium a few weeks ago for $489,000. She bought the home three years ago so her son could finish high school in Moorpark.
Now that she's an empty nester, she said, "it's time for me to go."
Snider figures that she will lose thousands of dollars, selling the home for less than what she paid.
But she hopes to recoup some of that loss when her next home appreciates.
Snider said there's been some foreclosures in the area, which she's found "unsettling." Still, her house hasn't been listed that long and she doesn't feel pressure to lower her asking price right now.
Other sellers might be trying to get out before prices drop even more.
"I keep hearing people say this is the bottom," Watkins said, adding that the numbers don't indicate that the lowest point has been reached. "It's pretty sobering."
When compared year over year, the housing numbers look "atrocious," said Mark Schniepp, executive director of the California Economic Forecast Project in Goleta.
"But seasonally adjusted, they haven't gone down any lower since November," he said. "Prices continue to erode, but sales don't seem to be going any lower."
The numbers don't surprise Schniepp, who projects transactions to start picking up and prices to start stabilizing possibly in the second half of 2008, depending on when and how the financial crisis is resolved. And that is based on when investors start buying mortgage-backed securities, which would supply more liquidity to mortgage markets for additional transactions.
"That's what we need," Schniepp said.
Because consumer confidence is low, Watkins doesn't see any reason to expect a spike in sales this spring.
However, one thing that could cause a turnaround is inflation, because homes are traditionally considered inflation hedges, he said. When the Fed's policy is inflationary, more people tend to flock to real assets, such as gold or real estate.
In Southern California, the typical boost in sales from February to March was less than half its normal level and a record low, DataQuick reported.
There were 12,808 sales last month in Southern California, a 41.4 percent drop from 21,856 sales a year ago. And the median fell to $385,000, a 23.8 percent decline from $505,000 a year ago. DataQuick attributes the record decline to slow sales for higher-priced homes, depreciation and growing sales of discounted homes that were recent foreclosures.
Nearly 38 percent of the homes sold last month in Southern California had been foreclosed on in the prior year, according to DataQuick.
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Posted by SmashyCrashy on April 16, 2008 at 9:26 a.m. (Suggest removal)
Ventura County Star really buried this one, it was page 1 of the Daily news business section and LA Times Business section.
Realtors should feel lucky for distressed sales, if it wasn't for them they'd have no sales at all.
Posted by daleeks on April 16, 2008 at 11:02 a.m. (Suggest removal)
They are just starting to flood the market. The peak will not arrive until 2009 when we might see distressed homes as 60-70% of sales and definitely setting the prices for years to come.
Posted by guy133 on April 16, 2008 at 11:38 a.m. (Suggest removal)
SmashyCrashy, do you have a blog? You seem to have a lot of interesting insight to the housing market. I'd like to see your thoughts on a regular basis.
Posted by freethought on April 16, 2008 at 3:26 p.m. (Suggest removal)
These sales numbers do not offer much comfort. Sales are still way down from the average March. This is a great indicator of how dismal real estate will be this year, since the normal rise in percentage of home sales from February to March is traditionally much higher than what we saw last month.
For those who can hold out, 2009 and 2010 will be great years to buy a property.
Posted by Blue_Dog on April 16, 2008 at 8:13 p.m. (Suggest removal)
I would love it if Smashycrashy had a blog. He's one reason I read the comments.
Posted by SmashyCrashy on April 16, 2008 at 8:34 p.m. (Suggest removal)
Thanks for the kind words I do appreciate them. I don't have a blog, I had a blog with some decent readership but I'm a little too intense on myself to come up with good content so it became more of a chore than fun so I shut it down.
I am frustrated with the lack of information on a lot of levels of the local housing scene. So I work on finding and studying data because, perversely, that is fun to me. I might have some more topical regional flavor available soon, that is what I am most interested in and I can tell by talking to people they want to know the same things. How/why did this happen Where are we right now, and where are we going. If I can come up with a happy medium to keep a conversation going on these questions I will let people know.
Posted by Rob_Dawg on April 17, 2008 at 10:02 a.m. (Suggest removal)
<i>When compared year over year, the housing numbers look "atrocious," said Mark Schniepp, executive director of the California Economic Forecast Project in Goleta.
"But seasonally adjusted, they haven't gone down any lower since November," he said. "Prices continue to erode, but sales don't seem to be going any lower."</i>
Absolutely the most misleading use of statistics I've seen in this bubble. That includes Gary Watt's 17% in the bag comment. The normal increase month over month from Feb to Mar is on the order of 24% The rise of 495 to 549 is much less than half that.
I blame the Star for letting this claim go unchallenged.
Posted by guy133 on April 17, 2008 at 11:35 a.m. (Suggest removal)
Smashy, I tried starting my own blog last year. But I am very amateur about the housing industry. I was trying to post as I learned, but didn't think I was providing any insight.
There are lots of housing market analses out there, but I can't find much about the Ventura County market.
FYI, my blog is http://crashingoaks.wordpress.com
Posted by freethought on April 17, 2008 at 4:30 p.m. (Suggest removal)
Two great blogs:
MISH: http://globaleconomicanalysis.blogspo...
(He touches on anything to do with the subject of economy, but tends to talk mostly about real estate)
Calculated Risk: http://calculatedrisk.blogspot.com/
(Pretty much all real estate-related)
SmashyCrashy: "I work on finding and studying data because, perversely, that is fun to me." I am exactly the same way, just quite a bit less knowledgeable than you on the subject. I do find it loads of fun.
Posted by ktlnhunt on April 26, 2008 at 8:43 a.m. (Suggest removal)
These stats are indeed grim. It just goes to show that you need to be financially stable, not buy over your head, stay in the house a long time, and buy in a "good" area to do well in CA real estate over the long term. Or you better be an investor with a lot of money behind you to take some significant losses! Not everyone should be buying real estate in coastal CA. It is not fair but it is the truth.
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