Wednesday, July 15, 2009
As if you don't have enough reading material, here's an article that will be in tomorrow's L.A. Times. Thanks to client Erik for forwarding it to me. The fact that home prices have risen will come as no surprise to anybody who has been out looking for a home lately. As much as I respect Peter Hong's journalism (he's the main blogger at the L.A. Times' real estate blog, LaLand), I question his conclusion that it is the higher-priced homes selling that's raising the median. (Correction 7/16: This is not Hong's conclusion; he is reporting Dataquick's conclusion.) My take would be that all single family homes are selling, and often in multiple offers, which tend to drive prices up. And since there are many buyers chasing few properties (see the Burbank Leader article about dwindling supply, below) well...high demand/low supply tends to make prices rise.
Hong points out an issue that I think we should all be mindful of: "Though lower-priced, repossessed properties have dominated home sales this year, they did not comprise the majority of homes sold in June. Last month, 45% of homes sold had been through foreclosure, the lowest percentage since July 2008. That trend could reverse, [emphasis mine] however, if a large backlog of Southern California homes in the foreclosure process end up being repossessed. A state foreclosure moratorium and voluntary efforts by lenders have slowed the rate of repossessions even as the number of borrowers failing to make mortgage payments is on the rise."