As housing experts continue to debate when or whether the housing market will finally turn around for good in 2010, the one thing most agree upon is that foreclosures and short sales will continue into 2010 or even outpace last year. In a nutshell, this means continued opportunities for bargain hunters this season.
Nationally, a full third of home sales in December were of “distressed properties,” representing foreclosures and short sales. Here in the desert, two-thirds of our ’09 sales were distressed properties with a 50/50 split between bank-owned and short sales.
Bank-Owned Properties Moving Quickly
In La Quinta during the last six months the average bank-owned property took 42 days to sell. But with a typical 30-day escrow period, 42 days really translates into just 12 days that a bank owned property was really ‘on the market’ before an offer was accepted. Valley-wide the average bank owned home sells in 46 days. Again, with a 30-day escrow, this equates to a mere 16 days before the bank accepted an offer.
Personally, I continue to experience a high demand for foreclosures and short sale properties. Demand also seems to be moving further upscale in the luxury property market than at this time one year ago.
Inventory Continues To Decline
California’s unsold inventory of homes declined to 3.8 months in December ‘09, the lowest level in five years, according to the California Association of Realtors® (C.A.R.). By comparison, the unsold inventory index for existing, single-family homes stood at 5.6 months of inventory supply in December ‘08.
Part of the inventory decline may be due to the fact that banks are controlling their foreclosure inventory better than last year. Once one bank-owned property sells, the bank places another on the market.
Real estate here in the desert seems to be continuing to stabilize from the bottom up. It’s getting a little tougher each month to find last year’s bargains in many of our most popular communities. This is especially true with single-family homes and luxury condos priced up to $500,000. There are still some great opportunities, but the time on market is shortening for the best opportunities. If a property is not selling, it is usually not priced correctly.
The luxury market above $1 million is also showing signs of improvement. More people – particularly from cold snowy climates – tend to look into desert home ownership during our warm winters and demand for a warm place in the sun remains fairly strong.