Sales of non-foreclosed homes still dropping

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Here’s another take on yesterday’s MDA DataQuick numbers showing a 65% spike in Southern California home sales in September: sales of houses that have not been in foreclosure actually fell from year-ago levels and are likely at their lowest levels in recent history.

In other words, there are two distinct housing markets in the region right now: the market for previously foreclosed houses, which is booming, and the market for non-foreclosed houses, which is arguably slower than ever before.

Numbers, from MDA DataQuick: In September 2007, 12,455 existing homes sold in the region; Of those, 12.6%, or 1,569, had been previously foreclosed on, and 10,886 were not foreclosures. In September 2008, 20,497 homes sold and split was 50-50 -- 10,248 previously foreclosed homes and the same number of never-foreclosed homes.

Now do the math: Sales of previously foreclosed homes spiked 553% in the past year; sales of non-foreclosures fell by 5.8% in the same time period.

DataQuick called the September 2007 sales level ‘pitifully low,’ the lowest level of sales it had measured in any September in 20 years. And in the non-foreclosure market, September 2008 sales were even lower. You could say, accurately, ‘pitifully lower.’

This is the same trend the OC Register’s Jon Lansner highlights today when he points out that sales in Orange County’s beach towns were much weaker than sales in the rest of the county. The beach towns have fewer foreclosures, and thus are weighted more toward the weaker half of the market -- the non-foreclosure market.

--Peter Viles

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Photo Credit: Laguna Beach home featured recently in Home of the Week, by George Briggs