A foreclosed home in East Los Angeles. Sales of foreclosures continued… (Mel Melcon / Los Angeles…)
Sales of foreclosed homes and sales of other distressed properties continued to fall in Southern California last month -- a big reason why the region’s median home price rose in August.
The flow of foreclosures onto California’s market also slowed dramatically in August, meaning that there will be no second wave of foreclosed properties hitting the market anytime in the near future.
Notices of default statewide fell 23.6% from July and were down 49.1% from August last year, according to data from ForeclosureRadar.com. The notice of default is the first formal step in the foreclosure process.
"We continue to see reports that there will be a wave of foreclosure sales after the election or at the start of the year,” said Sean O'Toole, chief executive at ForeclosureRadar. “The lack of foreclosure starts this month puts a nail in the coffin of this theory. There will be no wave of foreclosures for at least five months. The good news for investors and first-time buyers is that foreclosure sales have at least remained flat or slightly up, continuing to provide some opportunities in the meantime."
Foreclosed properties and short sales combined made up 36.8% of last month’s resale market, the lowest level since January 2008, real estate firm DataQuick reported.
Foreclosed properties made up just 1 out 5 sales last month, and short sales – where the property is sold for less than the outstanding debt on the home – also made up fewer than 1 in 5 sales.
That decline in distressed properties is a big reason why the region’s median home price is up. The median hit $309,000 last month, a 1% increase from the prior month and a 10.8% rise from August last year.
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