Post by unlawflcombatnt on Sept 14, 2007 2:18:33 GMT -6
from the Los Angeles Times:
Home sales plunge in August
Prices drop in most Southland ZIP Codes, and the number of sales is the lowest in 15 years for that month.
By Annette Haddad
Los Angeles Times Staff Writer
9/13/07
"Home prices fell in most Southern California neighborhoods and the number of sales tumbled to a 15-year low for August -- driven down by tougher lending standards, mounting foreclosures and skittish buyers.
Sales for the month plunged 36% from a year earlier. What's more, 71% of the Southland's ZIP Codes showed price declines, according to figures released Wednesday by DataQuick Information Systems....
"Prices are falling everywhere," said Christopher Thornberg, a former UCLA business professor....
In recent years, the housing market had been propped up by the widespread use of home loans with low introductory teaser rates -- [u[allowing prices to outpace income growth[/u], he said. But with those easy-credit loans all but gone, values are coming back into balance.
"People just don't have the income to support these prices except with crazy mortgages -- and now the mortgage money is going away, and people are walking away from their homes," Thornberg said.
Nearly 9% of the homes sold last month were foreclosure properties, DataQuick reported, up from 2.2% a year earlier.
Most communities are seeing price declines, and the downtrend is strongest in outlying suburban areas such as in Riverside County, where affordable homes attracted droves of first-time buyers -- many of whom could not qualify for traditional fixed-rated mortgages.
Today, many of these same buyers who counted on rising home values can't refinance their loans and can't make the escalating payments on their adjustable-rate mortgages, forcing them into foreclosure and putting yet more properties on the market.
"Virtually every community in Riverside County has massive inventory levels, which almost certainly will require price corrections in order to be absorbed," Riverside County-based appraiser Michael Mathis said.
Riverside County posted the worst showing of the six Southland counties in the DataQuick report, with the median home price there falling 6.1% and sales volume down 46.4% compared with August 2006....
"Buyers are hearing more and more about foreclosures and declining values, and frankly they are terrified even with these 'great values' being offered and are afraid to be purchasing when prices may still go down," he said.
Most economists and other industry watchers expect Southland prices to continue to ratchet down, especially if the supply of unsold homes grows. In August, the inventory of existing homes edged higher in all counties, according to real estate brokerage ZipRealty Inc.
In Orange County, there are so many homes for sale that it would take 14 months to sell them all at the current sales pace, said Steve Thomas, president of brokerage Re/Max Real Estate Services....
"Equally ominous is the fact that most recent analysis suggests that
the decline is accelerating"...
This summer, rising defaults on sub-prime mortgages to borrowers with shaky credit triggered a meltdown in global credit markets. That dried up capital for loans -- especially for so-called jumbo mortgages of more than $417,000 that are widely used to purchase homes in Southern California's pricier neighborhoods.
In early August, 43.4% of all Southland home purchases involved jumbo financing, DataQuick found. But in the second half of the month, the percentage dropped to 39.7%.....[/i]"
Home sales plunge in August
Prices drop in most Southland ZIP Codes, and the number of sales is the lowest in 15 years for that month.
By Annette Haddad
Los Angeles Times Staff Writer
9/13/07
"Home prices fell in most Southern California neighborhoods and the number of sales tumbled to a 15-year low for August -- driven down by tougher lending standards, mounting foreclosures and skittish buyers.
Sales for the month plunged 36% from a year earlier. What's more, 71% of the Southland's ZIP Codes showed price declines, according to figures released Wednesday by DataQuick Information Systems....
"Prices are falling everywhere," said Christopher Thornberg, a former UCLA business professor....
In recent years, the housing market had been propped up by the widespread use of home loans with low introductory teaser rates -- [u[allowing prices to outpace income growth[/u], he said. But with those easy-credit loans all but gone, values are coming back into balance.
"People just don't have the income to support these prices except with crazy mortgages -- and now the mortgage money is going away, and people are walking away from their homes," Thornberg said.
Nearly 9% of the homes sold last month were foreclosure properties, DataQuick reported, up from 2.2% a year earlier.
Most communities are seeing price declines, and the downtrend is strongest in outlying suburban areas such as in Riverside County, where affordable homes attracted droves of first-time buyers -- many of whom could not qualify for traditional fixed-rated mortgages.
Today, many of these same buyers who counted on rising home values can't refinance their loans and can't make the escalating payments on their adjustable-rate mortgages, forcing them into foreclosure and putting yet more properties on the market.
"Virtually every community in Riverside County has massive inventory levels, which almost certainly will require price corrections in order to be absorbed," Riverside County-based appraiser Michael Mathis said.
Riverside County posted the worst showing of the six Southland counties in the DataQuick report, with the median home price there falling 6.1% and sales volume down 46.4% compared with August 2006....
"Buyers are hearing more and more about foreclosures and declining values, and frankly they are terrified even with these 'great values' being offered and are afraid to be purchasing when prices may still go down," he said.
Most economists and other industry watchers expect Southland prices to continue to ratchet down, especially if the supply of unsold homes grows. In August, the inventory of existing homes edged higher in all counties, according to real estate brokerage ZipRealty Inc.
In Orange County, there are so many homes for sale that it would take 14 months to sell them all at the current sales pace, said Steve Thomas, president of brokerage Re/Max Real Estate Services....
"Equally ominous is the fact that most recent analysis suggests that
the decline is accelerating"...
This summer, rising defaults on sub-prime mortgages to borrowers with shaky credit triggered a meltdown in global credit markets. That dried up capital for loans -- especially for so-called jumbo mortgages of more than $417,000 that are widely used to purchase homes in Southern California's pricier neighborhoods.
In early August, 43.4% of all Southland home purchases involved jumbo financing, DataQuick found. But in the second half of the month, the percentage dropped to 39.7%.....[/i]"