Tuesday, April 13, 2010

DataQuick: SoCal house sales increase in March, "propped up" with FHA-insured loans

by Calculated Risk on 4/13/2010 03:06:00 PM

From DataQuick: More Incremental Gains for Southland Real Estate Market

A total of 20,476 new and resale homes sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was up 33.3 percent from 15,359 in February, and up 5.0 percent from 19,506 in March 2009, according to MDA DataQuick of San Diego.
...
“It’s a reflection of just how grim things got, that we’ve now had almost two years of sales gains and we’re still 18 percent below the sales average. ...” said John Walsh, MDA DataQuick president.
...
Foreclosure resales accounted for 38.4 percent of the resale market last month, down from 42.3 percent in February, and down from 54.8 percent a year ago. The all-time high was in February 2009 at 56.7 percent.
...
Meanwhile, Uncle Sam continues to prop up lending for many low-to mid-priced homes. Government-insured FHA loans, a popular choice among first-time buyers, accounted for 38.6 percent of all mortgages used to purchase Southland homes in March.

Absentee buyers – mostly investors and some second-home purchasers – bought 21.3 percent of the homes sold in March.

Buyers who appeared to have paid all cash – meaning there was no indication that a corresponding purchase loan was recorded – accounted for 27.1 percent of March sales. In February it was a revised 30.0 percent – an all-time high. The 22-year monthly average for Southland homes purchased with cash is 13.8 percent.
The SoCal market is mostly first time homebuyers using FHA-insured loans, and investors paying cash. Note that foreclosure resales don't include short sales - so the 38.4% foreclosures is not all of the distressed sales (probably over 50% in SoCal).