By Alejandro Lazo, Los Angeles Times
February 16, 2012
The Southland’s housing market is flooded with cash-rich, bargain-hunting investors snapping up distressed homes and dragging down overall prices — but their presence also indicates the market could be nearing bottom.
At $260,000, the region’s median home price was only 5.2% above the low hit during the worst of the recession in 2009, according to San Diego research firm DataQuick. January brought a 3.7% decline in the median price, the point at which half the homes sold for more and half for less, compared with both a month earlier and a year earlier.
Foreclosures, tight mortgage credit and high regional unemployment remain significant impediments to a housing recovery, though experts warn that January is not indicative of how the rest of the year will play out. Many observers expect the long-suffering housing market to finally hit bottom in 2012, particularly if the jobs picture brightens.
“While we are seeing year-to-year declines in home prices, I think we should probably see things level out as we get further into 2012,” said Robert Kleinhenz, chief economist with the Los Angeles County Economic Development Corp. “As we get further into the year we may see home prices stabilize.”
A separate report by Irvine data tracker RealtyTrac showed progress on foreclosures last month, with California filings hitting a 50-month low, as fewer new foreclosure actions were filed last month.
A total of 51,584 foreclosure filings were made against California properties in January — from the default notice that begins the foreclosure process to the auction scheduling to sale of the house — a 23% decline compared with January 2011. California posted the nation’s second-highest foreclosure rate, after Nevada, and nine out of the 10 hardest hit cities were in the state.
Experts warned that the Golden State could see more troubled properties hitting the market now that a settlement over foreclosure abuses has been reached among state attorneys general and the nation’s five biggest mortgage banks.
The declines in December and January were broad-based and most likely due to banks slowing down on foreclosures during the holidays and in anticipation of a mortgage settlement with the government, said Daren Blomquist, an analyst for RealtyTrac.
Nationally, foreclosure filings increased 3% from December but were down 19% from January 2011.
The housing report by DataQuick, released Wednesday, highlighted two trends playing out in Southern California: Sales of new homes hit their lowest tally on record in January, while so-called absentee buyers — mostly investors as well as some second-home buyers — made up a record share of the market.
Short sales, in which a bank allows a home to be sold for less than what’s owed on the property, also hit a recent high last month.
Builders have trouble peddling new homes against the competition from cheap, distressed properties.
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