Sale of Foreclosed Houses Is Increasing in California

In Southern California sale of foreclosed houses had increased by 51% in December 2008. A sweeping wave of foreclosed units entering the market further pushed down prices of single-family house and condos. This tempted many buyers to move in.

In December 2008 19,926 units (houses as well as condos) were sold in the counties of Los Angeles, Orange, Riverside, San Bernardino and San Diego. Last year the number of sales had been 13,240. The average price of houses fell by 35% to touch $278,000.

John Karevoll of DataQuick said that those markets that had experienced a frenzy were now in trouble.

Buyers are purchasing houses being sold at heavy discounted prices encouraged by Obama’s plans to put back vigour into the housing market by making use of the second instalment of the $700 billion bailout funds. The first half of the money from this TARP went to help financial lenders who were in trouble like Bank of America, Goldman Sach and others.

The Southern California sales figure show that 56% of the houses came from the foreclosure category – it being double that of the previous year during the same month. Foreclosed houses made up 70% of the sales in Riverside County. Here the average price had dropped by 41% falling to $209,000. The number of houses sold jumped by 77% to touch 4,435 units.

The entire Southern California region saw a decrease in the average price of property. Most of the selling was in the inland areas like Riverside and San Bernardino where the majority of the mortgage defaults are concentrated.

Sales activity has been picking up everywhere. Karevoll said, “What we’re seeing now is an awful lot of activity in markets with distress, and we’re seeing very little activity in markets without distress.”

According to DataQuick all the six counties in Southern California showed increase in sales operations. It was the most in San Bernardino with a rise of 89%. It also saw the deepest fall in average price by 43% to touch $180,000. A modest increase in sales was noted in Los Angeles County with the numbers being a spike of 32% from what it was a year previously. The average price fell by 32% touching $320,000. San Diego County marked the least increase in sales with a drop of 30% to fall to an average price of $300,000.