Los Angeles foreclosed homes for sale softened their impact on home prices in December, as foreclosure activity slowed when a lot of lenders decided to suspend their foreclosure actions during the holiday season.
As a result, the sales prices of single-family homes and condo units climbed up on a year-over-year basis.
Based on data from New York-based real estate research firm HomeData, the median sales price for a single-family home in December was $348,000, marking a jump from the November median of $339,000 and from the December 2008 median of $345,000.
The median sales price of condo units was $315,000, an increase from the November median of $305,000 and the December 2008 median of $310,000.
The total number of houses sold in December 2009 was higher by 30 percent than December 2008, although it was lower by around seven percent than November 2009.
Analysts were encouraged by the price and sales improvements, but they are concerned that the improvements are only temporary because of the forbearance efforts by lenders.
Christopher Thornberg, chief analyst for Los Angeles-based real estate consulting firm Beacon Economics, said that the drop in Los Angeles foreclosed homes for sale in December was only temporary because lenders just suspended their foreclosure actions during the holidays. It is expected that they will continue to pursue home and land foreclosures in the first months of the year.
Thornberg added that the federal tax credit, the low mortgage rates and other federal policies are temporarily propping up the housing market. He reiterated that existing home and condo foreclosures need to be absorbed before new foreclosures enter the market so that property prices do not plunge further.
Meanwhile, based on data from another research firm, default notices in California fell by almost 18 percent in December, after dropping by more than 32 percent on a daily basis, as lenders suspended their foreclosure actions. Fannie Mae, sister company Freddie Mac and Citigroup are among those which suspended their foreclosure acquisitions and evictions.
Foreclosure auction sales were also temporarily suspended, as auction sales dropped by 3.5 percent on a daily basis. With these suspensions, research firms said that foreclosure figures in December did not represent housing sector realities, considering that mortgage defaults increased in November and in December.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
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