At the beginning of 2009 roughly 60 percent of closings in California were repossessed homes. Now repossessions represent only about five percent of total sales. Sales of bank-owned homes made up a majority of California home sales during the last four years, but now represent only a small percentage of sales in the state.
So, what do you think California RE agents? Does this decline in REO sales indicate that the market is stabilizing in your area?
In 2013 the median price of a single-family home averages $408,600 in California. If the trend continues the projected price is expected to rise six percent brining the new median to $432,800 in 2014. A modest rate of appreciation can be interpreted as one sign that the state’s housing market is beginning to rebalance itself.
This trend can be attributed to numerous factors in the market place. The most obvious reasons are owners and banks finding alternatives to foreclosure and the impact of the state’s new Homeowners Bill of Rights. The trend includes the Los Angeles and Southern California markets.
The Homeowners Bill of Rights is a package of laws including several provisions to prevent or delay foreclosures, including a ban on dual tracking activities. Dual tracking activities occur when banks work on a homeowner’s loan modification request while simultaneously processing a foreclosure.
These laws resulted in a sharp decrease in foreclosure activity. This year home prices have appreciated rapidly and in August, the California median home price was $441,330. This is 28 percent higher than prices from 2012. This figure also signified the highest price recorded since December 2007.
So, what do you think? Are we heading into a stabilized market?
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