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Prices Improve as Los Angeles Home Auctions for Sale Decline

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By : Allana Castro    99 or more times read
The number of houses posted for Los Angeles home auctions for sale in April declined, allowing home prices to rise significantly during the month.

In April, the number of homes repossessed by lenders or bought by bidders through public foreclosed houses auctions for sale in Los Angeles County fell by one percent to 3,245 units, following the declining trend statewide.

During the same month, the number of homes that entered foreclosure auctions in California and later were repossessed by lenders or bought by bidders largely remained level at 16,932 units in April, just 40 units higher than the 16,892 units posted in March.

It was the total foreclosure filings that showed clearly the decline in foreclosure activity in April in California, as the 69,725 foreclosure actions filed in April marked a sharp 25.2 percent plunge from the 93,173 foreclosures filed in March and also a 28-percent drop from total filings in April 2009.

As foreclosures slowed down, the median price in Los Angeles County spiked by 9.8 percent from $300,000 in April last year to $329,500 in April this year. Home sales also increased by 4.1 percent, with 6,688 units getting sold compared to the 6,425 units sold in April 2009.

In the Southland region, the highest rate of price increase was posted by Orange County. The median price in Orange spiked by 13.2 percent from $380,000 to $430,000 over the year. Second was Ventura County, where the median price increased by 12.4 percent from $340,000 to $382,000 year-over-year. The lowest April median price – $150,000 – was posted by San Bernardino while the highest was posted by Orange.

The median price in April for Southland was $285,000, the same as the median in March but a jump of 15.4 percent from the $247,000 median in April 2009.

The price impact of Los Angeles home auctions for sale has weakened also because of the falling ratio of foreclosure homes compared to total house resales. In April, foreclosure homes accounted for only 36.4 percent of house resales, down from the 38.3-percent share in March and far below the 53.5-percent share in April 2009 and the all-time high 56.7-percent share, which was reached in February last year.

Although the share of foreclosure resales declined, a number of analysts contended that the share of properties bought through government home auctions increased as a portion of foreclosure sales. Mortgage records showed that FHA loans accounted for 39 percent of all mortgage loans taken out in Southland in April. FHA loans are preferred by first time home buyers as their minimum down payment requirement is only 3.5 percent.

With distressed homes declining, sales of higher-cost homes also increased in April in Southland. More than 19 percent of all housing units sold in April in the region were priced $500,000 or higher, up from 15 percent in April 2009.

It is therefore a smart move for investors to intensify their exploration of Los Angeles home auctions for sale now before house prices shoot up to much higher levels.
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