Southland housing market flat as spring selling season looms
This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.
As the key spring selling season looms, Southern California’s housing market remains sluggish with flat housing prices and declining sales in February.
The weakness comes despite record demand from investors and all-cash buyers.
The region’s median home price increased 1.9% from the prior month to $275,000. That was unchanged from the same month a year ago, according to DataQuick Information Systems of San Diego.
Sales remained weak, declining 0.6% from the prior month and down 6.4% from February 2010. A total of 14,369 newly built and previously owned houses and condominiums sold in Southern California last month, the lowest for a February since 2008.
The 847 newly constructed homes sold in the region last month marked the second-lowest level on record for a February, behind 842 sales in February 2009. Builders are faced with steep competition from so-called distressed homes: foreclosures and short sales, where the bank allows a homeowner to sell a home for less than the outstanding mortgage.
[Updated at 10:33 a.m. Despite these headwinds, builder confidence nationally improved in March, according to an index released by a trade group Tuesday. The index, from the National Assn. of Home Builders, rose a single point to 17 after remaining flat for four consecutive months.
Any number above 50 indicates that more builders view sales conditions as good than poor.
The reading of 17 was the index’s highest level since May 2010.
Regionally, results were mixed. The Northeast posted a one-point decline to hit 20, the Midwest was flat at 12, the South gained two points to hit 20 and the West gained four points to reach 17.]
Last month’s distressed sales –- the combination of sales of foreclosed homes and short sales –- accounted for well over half of the resale market. Foreclosures made up 37.1% of the market while short sales consisted of 19.8% of the market last month.
Competition for these distressed properties among investors and all-cash buyers is high. Absentee buyers –- mostly investors and some second-home purchasers –- bought a record 26.1% of the Southland homes sold in February, paying a median $198,000. And buyers who paid cash accounted for a record 31.7% of February home sales, paying a median $200,000.
RELATED:
Foreclosure prevention and refinance program extended
Bank of America offers mortgage relief for military
-- Alejandro Lazo
Twitter: @AlejandroLazo