Falling Prices Push Homes Sales Up: Expert Points to ‘Bargain Shopper’s Market’

RISMEDIA, January 22, 2009-(MCT)-Rose Vicente is tired of waiting.

Sixteen months after she and her husband, Manny, put their Simi Valley home up for sale for $650,000, they decided they couldn’t put their life on hold any longer.

Although they still are waiting for a buyer, the Vicentes purchased a home in Wildomar, Riverside County, and plan to move in February.

Last year, the Vicentes told The Star they wouldn’t budge when they lowered their asking price on their five-bedroom house to $495,000. Their outlook has since changed. The Vicentes just slashed their asking price to $379,000, a 42 percent reduction from their original asking price.

Their experience mirrors what is happening in the weak housing market.

Ventura County home sales shot up nearly 50 percent in December, but the median sales price fell by more than 35 percent from the previous year, culminating a nerve-racking 2008.

Sales were bolstered by foreclosure deals, which brought down overall home prices.

There were 876 new and existing homes and condominiums sold last month, up 48.5 percent from 590 the previous year, according to MDA DataQuick. It was the sixth consecutive month of year-over-year sales increases, a result in large part of buyers being lured by deeply discounted distressed properties. Foreclosures comprised 51.4 percent of last month’s resale activity.

The median, the point at which half the homes sold for more and half for less, was $338,000, down 35.6 percent from $525,250 in December 2007, according to the real estate information service.

A similar trend was seen throughout Southern California. Each of the six counties in the region reported a strong uptick in sales but a downward slide in prices.

A total of 19,926 new and existing homes and condominiums sold across Southern California last month, up 19.2 percent from 16,720 in November and 50.5 percent from 13,240 in December 2007 — the slowest December in DataQuick’s statistics, which date back to 1988.

Foreclosures comprised 55.7 percent of the resale activity last month in the Southland, up from 24.3 percent for the same month the previous year.

“It’s mostly a bargain shopper’s market,” said Andrew LePage, DataQuick spokesman, noting that mid- to high-markets are posting sluggish sales. “Some of the more expensive markets are at or very near record lows for sales.”

The Southland median was $278,000, down 34.6 percent from $425,000 in December 2007.

Sales from September 2007 through last summer were at the lowest in at least two decades, but they’ve since edged up, DataQuick reported. Still, last month was the fifth-slowest December in DataQuick’s statistics.

Sales gains were strongest in areas that were hit hardest by foreclosures, where home values experienced the greatest declines. The median for San Bernardino and Riverside declined 42.9 and 41.1 percent, respectively, but sales surged 88.5 percent and 77.2 percent.

Monthly mortgage payments that buyers are committing to are declining along with home prices. A typical monthly mortgage payment that Southern California buyers committed themselves to paying was $1,239 in December, down from $2,060 the previous year, according to DataQuick.

For the Vicentes, the substantial price drops gave them the ability to buy a second house in California, without being forced to wait until they sold their Simi Valley home. They decided on Riverside County because they were able to buy a 3,500-square-foot house — twice the size of their current home — for $300,000.

The space was important, Vicente said, since her son and daughter-in-law and their two children have moved in with them.

“Getting more house for your dollar is more important because grandchildren and kids are moving back home they can no longer afford to live on their own,” she said.

It’s been a tough road, and not just for sellers, Vicente said. As buyers, she and her husband were surprised to see severely damaged homes with kitchens and tubs torn out by bitter former owners.

She said she is hoping that the market will stabilize within the next five years so her family can move to Texas.

“I feel sad about leaving Ventura County,” she said. “But there are things you have to do. Hopefully, this will be better for the family.”

Copyright © 2009, Ventura County Star, Calif.
Distributed by McClatchy-Tribune Information Services.