Below is an article ran today by the Associated Press. California home sales are a leading indicator of Bend Oregon home sales. This tells me our real estate market may see the bottom this spring or summer. I showed property last weekend to two different cash buyers and they both wrote offers on Bank Foreclosures in Bend.
AP – “ Home sales in the Western U.S. surged in January as first-time home buyers, real estate investors and others seized on bargain-priced foreclosed homes in California, Nevada and Arizona, according to two reports released Wednesday.
A total of 74,000 existing homes and condos were sold in January in the 13-state region. Sales were up 32.1 percent from the same month in 2008, without adjusting for seasonal factors, according to the National Association of Realtors.
As has been the trend since last summer, distressed sales continued to fuel sales in the West, and that helped drag down median home prices in the region by almost 26 percent from the prior year to $220,000, the association said.
Nationally, existing home sales dropped 7.6 percent from January last year, while the U.S. median home price slid almost 15 percent to $170,300.
Las Vegas, Los Angeles, Phoenix, San Diego and San Francisco made up the top five major metro areas in the country to register an increase in home sales last month, according to the Associated Press-Re/Max Monthly Housing Report, released Wednesday. The data includes all home sales recorded in the metropolitan statical areas by all local agents, regardless of company affiliation.
Those Western cities ranked among the top 10 U.S. metros to post the sharpest median price declines last month, with San Francisco and Phoenix behind only Detroit.
Elsewhere in the West, sales declined in Honolulu, Billings, Mont., Seattle, Portland, Ore., Boise, Idaho, Albuquerque, N.M., Denver and Anchorage, Alaska, according to the AP-Re/Max report.
Of those metros, only Anchorage posted an increase in its median sales price, climbing 6.9 percent to $239,000.
Recession fears and rising unemployment kept many would-be buyers on the sidelines, but others were lured out by cheap prices and low interest rates — which briefly dipped below 5 percent last month.
“That’s what’s driving the first-time buyer,” said Marty Rodriguez, a Century 21 broker-owner in Glendora, a Los Angeles suburb.
Home sales in the Los Angeles metro area more than doubled from a year ago while foreclosures helped push the median sales price in the metro area down more than 37 percent to $250,000.
One such first-time buyer, Bonnie Magallon, scooped up a two-bedroom, 2.5-bath tri-level town home in Rancho Cucamonga, about 42 miles east of Los Angeles.
Magallon, 25, wasn’t in a rush, figuring she would buy something by the end of this year. But shortly after getting prequalified for a loan, she saw the condo and went for it.
“It just worked out perfectly, just everything has aligned where I could afford it, it’s a great area, (and) I love the condo,” said Magallon, a senior secretary, who expects to close escrow on the $205,000 condo Friday.
She plans to keep the unit between three to five years and isn’t worried about the possibility she could end up owing more than her home is worth if the housing downturn drags on beyond this year.
“For me, it was more (about) taking advantage of the market,” she said. “I’m not scared about it because with my lifestyle and what I make, I’m fine with the payments.”
Like many home buyers these days, Magallon financed her purchase with a loan backed by the Federal Housing Administration, which requires a down payment of 3.5 percent.
Magallon also got a half-percent cut on her 5 percent interest rate for the first year that shaves off $120 a month from her monthly payment.
Another first-time buyer, Michi Crone, closed on her four-bedroom, 2.5-bath home in the Queen Creek suburb of Phoenix last month.
Crone, 33, had looked into buying a home four years ago, but the medical office worker didn’t find anything she liked in her price range, which back then topped at $175,000.
The 2,400 square-foot home last sold for $213,000 during the boom. She bought it in a distressed sale for $110,000 and the bank paid the closing costs, Crone said.
“We really fell in love with this house,” she said, noting that her monthly payment is $100 less than her rent was. “The market wasn’t really a factor in making our decision.”
Sales climbed about 68 percent in the Phoenix metro area, a hotbed of foreclosures that saw speculation-driven price increases during the housing boom. The median home price dropped about 42 percent to $129,900, according to the AP-Re/Max report.
The San Francisco metro area saw the steepest drop in median price in the West, a decline of more than 44 percent to $330,000. Sales jumped by nearly 57 percent, according to the AP-Re/Max report.
Ben Coleman, broker-owner of Century 21 Hartford Properties in San Francisco, saw a 50 percent increase from a year ago in closed transactions, he said.
“It was a great month and we’d love to see that continue on,” he said, crediting first-time buyers for the largest slice of business, followed closely by investors.
“The properties that are moving the fastest are the ones that are priced probably in the $250,000 range and less,” Coleman said.
Many of the homes selling in that range were distressed properties, although Coleman says he’s seeing fewer foreclosures on the market.
“The asset managers that we’ve talked to are saying they don’t have anything in the hopper for us,” Coleman said.
In Las Vegas, sales more than doubled versus January 2008 and the median sales price sank more than 36 percent to $149,900.
Many buyers shopping for bank-owned homes continue to face multiple competing offers, said Brad Snyder of ZipRealty, whose transactions in January were entirely made up of distressed home sales.
Snyder’s business last month easily eclipsed that of January 2008, with first-time home buyers making up about 40 percent of transactions.
“They’re coming out in droves,” said Snyder. “You can get a mortgage right now for less than you pay in rent.”
Still, investors, an overwhelming majority of them paying cash and hailing from states like California, outpaced first-time buyers last month, he said, adding that February looks to easily beat his year-ago sales.”
If you’re serious about buying
