Foreclosure fuels sales bounce in hard-hit areas
Good trend-spotting by the Wall Street Journal: "Home sales are rising in some U.S. metropolitan areas where lenders have slashed prices on foreclosed properties."
Metro areas such as? Such as Sacramento: "In California's Sacramento County, sales of single-family homes totaled 1,669 in April, up 41% from a year earlier, according to DataQuick Information Systems, a research firm. The median sales price was $226,250, down 34%. Alan Wagner, president of the Sacramento Association of Realtors, says the rise reflects more aggressive pricing by lenders. "They've got to liquidate inventory. They're taking that house and dropping $100,000 off the price, and all of a sudden they've got multiple offers," he says. Some homes that sold for more than $400,000 a couple years ago now go for $225,000 to $260,000, Mr. Wagner says."
Lastly, check out what has happened in the city of Detroit: The average price of a home sold in the first four months of the year dropped 56% from year-ago levels to $20,514. That is not a typo.
Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.
It must be strange to drive a car that's worth more than your house and to be able to buy a house on your credit card. I know, I know, soon we'll be able to do the same thing in SoCal..........................
Posted by: puckhead | May 26, 2008 at 10:01 PM
Peter, talk about Detroit makes good bubble speak but is irrelevant to Southern Ca housing values.
Posted by: shockg | May 26, 2008 at 10:02 PM
Well, the Russians breathed a sign of relief when they said to themselves: 'Sure, the Tsar is gone, but with the Kerensky government in control now, things will stablize. The free-falling should stop now.'
Hmmm, what can I say. Some geniuses thought it was a good time to buy in Metro Moscow..., hey, we are taling about the Third Rome here and they kept on buying, right up to October, 1917.
Posted by: MyLessThanPrimeBeef | May 26, 2008 at 10:45 PM
With Interest rates on savings that are so low, there is plenty of cash that sits in investors pockets and is ready for "adventures". Right now, it is not worth to have the cash in stocks, CDs or just in the bank earning 2%. So this cash is finding its way to buy many of the foreclosures right now. Problem is that there are not that many plain Joe and Jane that can qualify for mortgages and buy these houses from the investors/flippers. Once these flippers find out what is happening, they will stop or slow down in buying, and the second wave of drops will start.
If housing in specific areas are now inline with incomes - that could mean stabilization. If incomes are still way down of supporting the prices, we are not there yet.
Posted by: Laker | May 26, 2008 at 11:07 PM
Sounds like the Dead Cat Bounce pattern to me!
http://en.wikipedia.org/wiki/Dead_cat_bounce
Some buyers are in for a rude awakening,
when discover they caught a falling knife!
Posted by: Enlightenment | May 27, 2008 at 03:39 AM
L.A.Land, the only blog at the LA Times worth reading, is too hard to find on the front page. What gives? I have to go through several steps to get to you. Please get a permanent link on the front page.
Posted by: Mike Barker | May 27, 2008 at 05:03 AM
Painful, I imagine there is still much more of the wailing and gnashing of teeth coming for other parts of the state as the bottom seems much further down. I blog on it at http://amerifault.com/blog although my real passion is my aviaition site. http://www.what2fly.com which also has a blog.
Posted by: will | May 27, 2008 at 06:02 AM
As a lovely lady once told me, 'you can watch, but don't touch'...this happened in a respectable, upscale museum, by the way, and that's how one should approach this housing market, I think.
Don't exhale into the bubble.
Oh, to continue the story about the October Revolution, afterwards the Russians, when faced with complacent comrades experiencing a temporary lull in a storm, had a saying, 'Watch out for the big ones. Be prepared,' referring of course to Kerensky's new boss, the Bolsheiviks, which, I am told, in Russian means the big boys, or the big ones.
As it happened, on the eve of the take over, lefty closed a deal to buy a juicy property in Metro Moscow, around the Red Square, or whatever it was called then, Nicholas Prospekt or something, and was celebrating in a nice restaurant while Omar Sharif and Julie Christie were embracing passionately nearby.
The rest, as they say, is history.
By the way, today's top news: home prices plunged at record pace, down 14.1%...nationally. Not sure about California's number yet.
Good morning, LA.
Posted by: MyLessThanPrimeBeef | May 27, 2008 at 07:03 AM
Shockg,
Why don't you start your own blog, so everything that is written is exactly as you want it?
Honestly, I find the criticism here quite ridiculous sometimes. If there's something that you think is superfluous, than just move on to the next article or a different blog. Your whining is annoying.
Posted by: Tony | May 27, 2008 at 07:38 AM
E. Scott Reckard has interesting story on San Diego company that is being thoroughly investigated for multiple bilkings of distressed homeowners using a "land grant" scheme. Creative little cockroaches.
http://xrl.us/bk4ei
(tinyurl seems to be having difficulties today)
Posted by: Uncle Billy Climbs Mont Pelerin | May 27, 2008 at 08:42 AM
puckhead,
I sure can buy a house on my credit card in Detroit...actaully i can put 5 of them on one of my Bank of America visa's or put 3 on my WAMU mastercards...
Posted by: Laker | May 27, 2008 at 03:52 PM
Leaving aside the merits (or lack thereof) of comparing the Southern California housing market to pre-revolutionary Russia, I will say that this...
"Bolsheiviks, which, I am told, in Russian means the big boys, or the big ones."
...isn't quite right. "Bolshevik" translates simply as "majority." The name derived from a 1903 faction split within the Russian Social Democratic Labor Party (RSDLP). The larger group in the split (i.e., the majority), which Lenin was a part of of, were referred to as the Bolsheviks; the smaller group (i.e., the minority) were referred to as Mensheviks.
Through many twists and turns of internal party politics, the faction names simply stuck, even though in the end, the RSDLP was pretty much evenly split between the two. The Bolsheviks formally became an independent party in 1912.
So regardless of any thoughts about Bolshevik ideology, there was originally no cononation of being the so-called "the big boys." Had Lenin's side happened to have been the smaller group in 1903, they (and not the others) would have wound up being known to history as the Mensheviks.
Posted by: SC | May 27, 2008 at 04:28 PM
That last post by SC... well written, tenses in perfect order, extremely well informed. I think were were visited by a very lucid thinker. Lucid thinker, will you be posting again? Pull up a chair!
Now all I have to do is reconcile this post with the fact that the poster calls themselves "SC."
Posted by: Duke of Moral Hazard | May 30, 2008 at 12:15 PM