Could this be a trend? Home sales up in Riverside County*

A report today by the California Assn. of Realtors says sales of existing homes were up 17.5% statewide in June from a year ago: 420,550 single-family homes were sold in June at a seasonally adjusted rate, versus 357,890 in June 2007. A big reason for the increase: bargain hunting at the lower end of the price range.

"Sales were driven in part by larges shares of deeply discounted distressed sales in many parts of the state," said CAR president William E. Brown.

The counties showing the most sales strength were, not surprisingly, those hardest hit by foreclosures. Sales in Sacramento County nearly doubled, according to CAR's seasonally unadjusted data; in Riverside County, sales jumped 75%.

This is more or less in keeping with data released last week by research firm DataQuick Information Systems. For the month of June, DataQuick reported, sales were in positive territory in the Inland Empire.

Nonetheless, by all measures prices continue to decline -- according to the Realtors, the statewide median home price declined 37.7% to $368,250 -- no doubt because all these resurgent home buyers are driving hard bargains.

*Update and clarification:

The reason the C.A.R. numbers differ from the DataQuick numbers is because C.A.R. uses seasonally adjusted data. From its report today:

The statewide sales figures represents what the total number of homes sold during 2008 would be if sales maintained the June pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

Posted by Annette Haddad

Photo: Associated Press

Question? Comments? Email: annette.haddad@latimes.com

Comments

[It All Happens on the Margin]

SFVRE:
Sorry, business term mixed with RE.
http://en.wikipedia.org/wiki/Organic_growth

Traditionally, sales growth would involve either move-in or move-up numbers - someone sells her house and buys a new one - that would account for 2 sales (assuming the buyer for the aforementioned seller is a first-timer).

That's organic growth.

If I bought a home then walked from another, this is simply churn - a non-productive sale. That's why I mention vacancy rate. If sales are non-productive, then we're playing musical chairs, only one chair is added to the circle when the music stops. I know of 2 very close contacts that are doing just that - qualifying for the second place on their income (FHA), buying the second place, walking from the first. Bingo, SALES ARE UP!

Does that make sense?

[Cal]

SFVRE,

I didn't actually talk about how sales were at all. But since you asked.

San Fernando Valley June sales were the worst June on record. Sales will "improve" to the second worst months on record starting next month and should maintain that "improvement" through the end of the year. By the end of the year we should be about dead even in total sales with 2007 (dollar volume should be about 20% lower).

Dollar volume of all sales has dropped 27% YTD compared to 2007 with sales being down 14% YTD compared to 2007.

Brokerages are taking it in the shorts and you can see that if you drive around a lot you'll see various brokerage offices closing and consolidating.

While I do think sales have bottomed that doesn't mean prices have bottomed. I just can't see us replicating last July through February again unless Fannie/Freddie go under. I think people will just have to get used to these slower sales volumes unless prices adjust more. Sellers get to understand what "illiquid asset" really means. And that is fine if they don't have to move, get divorced or married, don't have more kids, want to downsize, don't die, don't lose their jobs etc. Fewer sales also means fewer re agents, escrow officers, loan officers, etc.

[Cal]

Ace:

Excellent advice. I did what I could when I rented (checked the owners purchase price on zillow relative to the current ballpark value) but found out later from someone with public records access that their equity position was much lower due to refis. I don't foresee a NOD in the future but I keep vigilant none less.. can't trust these low-life homeowners too much after all :-).

With the new California law allowing renters 60 days to stay after a foreclosure is completed it becomes much less of an issue. Just don't give more than one month in security deposit and you will be nothing out of pocket if it does happen. And you get the possibility of cash for keys.

[Truth2Pwr]

Snore....

There will be several false bottoms as investors and family men with wives and kids bitching non-stop at them to buy them a house get suckered into thinking that they're buying low. They aren't. Check back in 2010 or possibly 2011 for the bottom. Oh, and buy the way, don't get too excited when it comes. There won't be a bounce. This is a correction, not a cycle.

[SoCalRealEstateNews.com]

Cal,

Thanks for taking the time to check out the post & respond.

Sorry about the "royal" we--there are two of us that write SoCalRealEstateNews.com, and the default byline has both our names. I do most of the writing & vacilate between "i" and "we.". When I know my colleague agrees with me I often say "we." I may try switching to "Blair and I."

As for the "Chinese math" in Alfalfa's model, my thought was that there were errors on both sides. For example, I never agreed that the median income should buy the median home: For one thing, almost all of the bottom quartile in income are renters or live with family. In addition, most people begin with a starter home or condo way below the median and work their way up, rolling equity into a substantial down payment as they go. (If they didn't refinance too much!) Good point on the mortgage insurance.

As I've reviewed the contents of the "bailout bill," I'm increasingly convinced that it will have a significant positive impact overall. For example, there's $3.9 billion for cities to buy up foreclosures. More significantly, there's a first time buyer tax credit of $7,000 through June 2009. I just put up a post reflecting this, and projecting 40% chance of a bottom before next spring.

There are other signs of a possible turnaround as well. CAR today reported inventory dropping in OC for the 4th month in a row. And DQ's had OC's median up from May to June. OC more built out than L.A. County and isn't impacted as from overbuilding and new construction in the Antelope Valley, L.A.'s own little I.E.

Bears may disagree, with my cautious optimism, but I've been through this cycle 4 times since I started in 1980, and it usually is "darkest just before the dawn." In any case, I'm projecting a 60% chance the bottom won't come until early 2010, so I can hardly be accused of being a raving bull or industry spokesperson.

Thanks again for your feedback.

[SoCalRealEstateNews.com]

Ace & Cal:

In California, renters of single family homes should have a "Notice of Default" posted by the bank on their front door a minimum of 111 days before the home is sold at auction. In addition, a "Notice of Sale" must be posted at least 21 days before the actual sale.

Just be sure to read and save the notice. In case the owner starts an Unlawful Detainer action, you can show the N.O.D. to future landlords to document your situation. You might actually contact the bank via the number of the trustee on the Notice to see what they want you to do with the rent. In most cases their loan documents allow you to make payment to them.

[inland Empire]

Excellent advice. I did what I could when I rented (checked the owners purchase price on zillow relative to the current ballpark value

You would actually have a more accurate analysis by using the magic eight ball instead of zillow.

[Ace]

Cal 'I did what I could when I rented (checked the owners purchase price on zillow relative to the current ballpark value) but found out later from someone with public records access that their equity position was much lower due to refis.'

I can't believe how many short sales I keep coming accross now for condos and houses that were bought in the 1980's and now they are underwater.

Am I the only one shocked by people who owe $500k on a condo they bought for $78k? I have gotten so cynical that I am waiting to see a foreclosure sign everytime I pass a house with a giant plasma tv. There is one house that I walk my dog past that has 2 Porsches that they park in the street because they don't have a garage attached to their 1200 square foot shack. Who buys $150k worth of cars and does not have a garage?!?!??!

[shockg]

Some interesting and positive news about the OC housing msrket. Bears/speculators, don't read this if you don't want to get your fur ruffled.

"Early July’s house-buying burst is best since Sept. ‘05
July 25th, 2008, 3:38 am by Jon Lansner/O.C. Register columnist
Remember September 2005? That was the last time Orange County saw single-family house sales running above the year-ago level. But after 33 months of declines, has the slump run out of gas, so to speak?

DataQuick’s first glance at July homebuying shows 1,857 house purchases made in the 22 business days ended July 9 — that’s 5.2% above the year-ago total. If that trend held for the month, July will have been the first year-to-year winner in 34 months. (Note: Overall homebuying was just 48 sales (1.7%) below the year-ago total. Total sales, too, have not beat a year-ago pace since September ‘05!)"

[Laker]

sfvrealestate,
thanks for asking about me.
I was busy today, but now, i can share my $0.02 cents on this.
There are many houses that are vacant but not listed for sale. Some even still populated by the previous owners - now squatters.
The mere fact that there are more sales now is a proof that fools don't disappear but replace each other.
However, there is also another way to look at it. The increased number of sale at lower and lower prices, helps to set comps lower and thus drive/bring more buyers. This is in fact the natural process of reaching equilibrium. Eventually, prices will go down and low enough to bring in enough buyers to create a demand == supply. Them, price will stop falling and start rising albeit very very slowly pegged to incomes and financing availability.
In SFV, prices are falling now faster than 6 months ago, so no rush...

[mbob]

Hey, easy on the cats. Dead realtor bounce, please.

Anyone who wants to look at Comstock Partners site can find Charlie Minter's column that links to a "peak/trough" comparison of stock indices since the 1930's.

We could still have a long way to go. Argue with the numbers if you wish.

[Westside Home Buyer]

Purchasing a home now, like then, should be done with an extreme amount of caution. Having that said, dramatic headlines screaming one thing or another should not dictate what buy or sell. Asses your financial situation honestly and and make an educated decision based on as few variable as possible.

[puckhead]

"There is one house that I walk my dog past that has 2 Porsches that they park in the street because they don't have a garage attached to their 1200 square foot shack. Who buys $150k worth of cars and does not have a garage?!?!?"

Take a look at South Pasadena and the hills in Mount Washington. Older houses and houses on hillsides where garage parking is a premium. Very common.

[Laker]

SoCalRealEstateNews wrote: "... it usually is "darkest just before the dawn...."

SoCalRealEstateNews,
Let me correct you. It is not darkest just before dawn but actually COLDEST.
That is the difference between a true bottom and a fake bottom. You don't need to be a crystal ball reader or anything special. The secret to find bottom is easy and i will share it with you. Simply follow incomes and prices on some street.
when the income can support the prices that is bottom. Right now, incomes are nowhere near supporting it...you need at least 30-40% cut across the board in ALL areas just to get to that ballpark. You know I'm right, but that's OK, you don't need to admit that.

[Bob]

Read the comments on this blog from 4, 6 or 8 months ago and you'll see many predicted a summer blip during the peak summer selling months.

Here it is, the summer blip before the dive into fall.