Distressed Properties Drive California Home Sales

California’s June home sales were dominated by transactions involving short sales (sales that did not equal the amount owed on the property) or homes in foreclosure, according to …

California’s June home sales were dominated by transactions involving short sales (sales that did not equal the amount owed on the property) or homes in foreclosure, according to statistics by DataQuick. Both the overall sales volume and the median home price of houses sold was up from the previous month, but down from June 2010. Although foreclosures activity is in decline, the number of foreclosures is still historically high in the state. For more on this continue reading the following article from The Street.

An estimated 38,975 new and resale houses and condos were sold across California last month, with distressed property sales making up more than half of resales.

The overall sales volume was up 9.7% from 35,536 sales in May, and down 11.3% from 43,964 sales in June 2010, according to San Diego-based DataQuick. California sales for the month of June have varied from a low of 35,202 in 2008 to a high of 76,669 in 2004, while the average is 49,929. DataQuick’s statistics go back to 1988.

The median price paid for a home in California last month was $253,000, up 1.6% from $249,000 in May and down 6.3% from $270,000 in June 2010. The year-over-year decrease was the ninth in a row after 11 months of increases. The statewide median’s low point in the current cycle was $221,000 in April 2009, while the peak was $484,000 in early 2007.

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Of the existing homes sold in June, 35.0% were properties that had been foreclosed on during the prior 12 months. That was down from 35.3% in May but up from 34.1% in June 2010. The all-time high was 58.5% in February 2009.

Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 17.6% of resales last month. That was the same as in May and down from 20.0% a year earlier. Two years ago short sales made up 13.5% of the resale market.

The typical mortgage payment that home buyers committed themselves to paying last month was $1,027. That was up from $1,026 in May and down from $1,125 in June 2010. Adjusted for inflation, last month’s mortgage payment was 53.8% below the spring 1989 peak of the prior real estate cycle. It was 62.5% below the current cycle’s peak in June 2006.

San Diego-based DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

Indicators of market distress continue to move in different directions. Foreclosure activity has declined but remains high by historical standards. Financing with multiple mortgages is low, down payment sizes are stable, cash and non-owner occupied buying has eased a bit in recent months but remains relatively high, DataQuick reported.

This article was republished with permission from The Street.

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