Tuesday, May 3, 2011 at 6 a.m.
Despite some hints of stability in San Diego County‘s home market, the region “will continue to be troubled and fragmented” by an excess of distressed inventory, say three industry leaders with USD’s real estate center, in their quarterly market report.
Then: Before the housing bubble burst, “regular” sales, or non-distressed properties made up the bulk of the transactions. “Today,” last week’s report says, “things are different, and sales are segmented. The authors — Norm Miller, Charles Tu and Louis Galuppo — cut the county’s inventory into five wedges to give readers a comprehensive understanding of where we stand in residential sales.
Their findings, which capture the first quarter of the year, looked at the average sale prices and number of sales for five sectors, focusing on single-family homes.
A summary —
Regular sales: This means non-distressed sales. They made up 45 percent of total sales in the first quarter, which is “relatively consistent” with the first quarter one year ago, the authors said. The percentage of regular sales sank as low as 31 percent of all sales in early 2009. For a stretch of time — from early 2000 to mid-2006 — such sales comprised about 80 percent to 90 percent of all sales.
New home sales: The report says sales of new homes “remain anemic.” In the first quarter, such homes made up 2 percent of combined transactions, down from 10 percent to 20 percent in a “healthy market,” the authors said.
Distressed sales: This group contains the last three housing segments outlined in the report and includes REO’s (bank-owned properties,) foreclosures and short sales. Such sales made up the majority of the market during the first quarter, at 53 percent. Since 2008, sales of REOs and foreclosures have ranged from 38 percent to 59 percent of all sales. Short sales have slowly gone up, now at a peak of 9 percent.
The upshot: The three experts say government programs have made it hard to predict what will happen to the market. But if they had to guess, they say lenders will move ahead with foreclosures and will get rid of their bank-owned properties throughout the year and maybe early into next year.