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Short Sales and Auction Homes Sales Rise in California

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By : Clark Raitz    99 or more times read
Sales of residential properties, including auction homes, increased in California for November 2010 when compared with the previous month. However, when compared with the previous year, total sales recorded a decline. Short sales, on the other hand, have gained ground and accounted for a bigger percentage of housing unit sales.

Sales of existing residences, including Los Angeles REO homes and single family dwellings from other areas of the state, reached a seasonally adjusted total of 490,950 during the month. The number represents a 9.2% jump compared with October, but translates to a decline of 8.6% compared with November of last year. Meanwhile, houses sold through short sales also increased during the month.

According to analysts, the increase in short sales in November is encouraging for the state’s housing market. However, they stated that it is difficult to predict whether the trend will continue since short sales are difficult to negotiate and most do not reach the closing stages. They reveal that in most cases, it takes three months for a lender to inform the parties that their application has been approved.

Although the number of residential properties as well as auction homes that were sold during the month showed some improvement, analysts stated that a sustained recovery is still way beyond the reach of California. Housing experts believe that the high levels of foreclosed and distressed properties in the market are preventing the state from mounting a sustained recovery. They also stated that unless lenders can find ways to improve the processing of short sales, the residential property industry will not be able to fully recover.

Another hindrance to the industry’s recovery cited by analysts is the continuous decline in the prices of Los Angeles REO homes and other residential property types all around the state. Median prices of existing houses in California averaged $296,820 during the month, the first time that they went below the acceptable $300,000 mark since February of this year. The latest median price represents a decline of 2.4% compared with October.

When compared with November 2009, median prices of auction homes and other types of existing dwellings went down by 2.5%. One bright spot, though, is that the inventory of unsold houses declined in November compared with the previous month, especially for residences priced beyond the $500,000 range.
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