http://www.movoto.com/, the spot on the internet to find and buy a home in Northern and Southern California, today released the company’s monthly California home inventory report. Movoto’s report is drawn from nine different local California multiple listing services and gives a snapshot of local inventories of homes for sale, average list prices, time on market and inventory of distressed properties.
California’s home resale market continued the decline in inventories that started in August with 15 of 18 counties covered showing decreases in inventory. Prices were mixed with some counties still seeing significant downward moves, while other counties’ average prices are holding. Distressed properties as a percentage of the total market were generally steady with perhaps a small downward bias.
With the credit crisis and urgent questioning of asset values on bank balance sheets, banks are getting serious about clearing inventory off their books and have become flexible with buyers on pricing and terms. Even though California foreclosure levels remain at record highs, total inventory is dropping and distressed inventories are steady. Finally, the “bad assets” we’ve heard so much about are getting sold slightly faster than they’re coming on the market. Banks are finding prices that buyers will accept and that meet government sponsored entities loan program guidelines – creating signs of hope in California.
Not surprisingly, inventories in the 2 most expensive counties in our coverage (San Francisco and San Mateo) are countering the trend and show increasing inventory. Buyers are finding it difficult to find the jumbo loans needed to purchase the average $1 million property in these neighborhoods. With the ongoing credit crisis, most banks are trying to reduce their exposure to home loans and since few jumbo loans can be sold on the secondary market, banks would be forced to hold any jumbo loans on their books – not an attractive situation for banks in today’s markets. Lower end buyers that meet the requirements for Freddie Mac, Fannie Mae, VA or FHA loans are having no problems getting funds and are driving the market in lower priced parts of California.
September ending Home for Sale inventories are DOWN across Movoto’s coverage area with 15 of 18 counties showing a decrease in listings.
Average list prices were DOWN August to September with 13 California counties showing a decrease in average list price and only 7 counties showing an increase in average list price.
September’s inventory aging report shows a slight reduction in total days on market versus August. Ending September, 6 counties exceeded 50% of inventory on the market more than 90 days.
“Distressed Properties” share of the market was MIXED with all 6 of 18 counties showing decreases in distressed inventories as a share of the market and with the remaining counties showing small increases.
Movoto defines distressed properties as any property that has an agent note in the MLS that defines the property as “Bank Owned”, “In Foreclosure”, “Short Sale” (where the owner is trying to sell at a price below the mortgage balance to avoid foreclosure) or “REO” (a term used to indicate the property is bank owned).
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