More Resales Turn Profit
Of the approximately 140,600 homes and condos sold in Southern California in 1992, about 83,500, or 59.4%, were sold for more than the seller originally paid. About 33,240, or 23.6%, were sold for less.
The remainder of the homes, accounting for 17% of last year’s transactions, sold for within $1,000 of the seller’s original purchase price.
The figures were released by La Jolla-based Dataquick Information Systems, which monitors home sales data in California from county records, and the Southern California Real Estate Observer newsletter.
The numbers cover all “arms-length” transactions and do not include foreclosures, family sales and sales where length of ownership was less than one month.
Although there were sellers in all areas and price ranges that had to take losses, the problem was especially prevalent among those who bought their homes during the run-up in price three and four years ago. The “median” purchase date for homes sold at a loss was November, 1989.
The homes were typically large, fairly new and rich in amenities. About 15% of the entry-level homes were sold at a loss last year, about 40% for homes at the high end. The median price paid for a 2,450-square-foot four-bedroom home during that period was $303,000. The current median is $279,000.
Homes at the entry-level part of the market have generally retained their value. For example, a 1,175-square-foot, three-bedroom house currently sells for $152,000, roughly the same price as one, two and three years ago.
The median loss for homes sold at a loss was $18,000. Losses ranged from $13,000 for the few entry-level homes to $34,000 for homes at the high end.
“While some homeowners had to grit their teeth and sell at a loss,” said John Karevell, editor of the Real Estate Observer, based in Running Springs, “in a normal market there is always a certain portion of homes that sell for less than purchase price.”
Median gain among home sellers was $25,000. Gains ranged from $19,000 for entry-level homes to $61,000 for the high end.
The figures show that more than twice as many homes were sold at a profit than at a loss, and the profits were much greater than the losses. While losses totaled more than $800 million, the amount of profit (minus commissions and fees) added up to almost $5 billion in 1992.
Home Resales in 1992
Resales No. Loss as Median Percent Median 1992 sold at % of all size of sold at size of a loss sales loss a gain gain Los Angeles 58,627 14,173 24.2% $21,000 57.8% $29,000 Orange County 20,895 6,213 29.7% $17,000 53.3% $25,000 San Diego 24,719 5,147 20.8% $14,000 60.2% $22,000 Riverside 11,584 2,236 19.3% $10,000 63.7% $19,000 San Bernardino 15,052 2,089 13.9% $13,000 68.1% $25,000 Ventura 7,209 2,655 36.8% $24,000 44.2% $27,250 Santa Barbara 2,528 726 28.7% $13,000 53.3% $22,500 So. California 140,614 33,239 23.6% $18,000 59.4% $25,500
