“In the beginning of 2009, 60 percent of the closings in our state were REOs (repossessed homes),” California Association of Realtors chief economist Leslie Appleton-Young said in a Tuesday conference call. “Now it’s around 5 percent of total sales.”
Appleton-Young on Tuesday presented the Realtors’ forecast for the coming year during a conference call. Appleton-Young delivered her remarks on the same day that the Realtors group opened its California Realtor Expo at the Long Beach Convention Center.
In terms of pricing, the trade group is predicting the median price of a single-family home in California will rise to $432,800 in 2014. That figure would signify a 6 percent rise over the projected 2013 median of $408,600.
A median price of $408,600 would be 28 percent higher than last year’s prices, but a modest rate of appreciation combined with a diminishing proportion of bank-owned and other distressed homes among California real estate deals can be interpreted as one sign the state’s housing market is returning to a “normal” situation.
Concerning distressed properties — foreclosures and short sales — one analyst said a combination of factors including homeowners and banks finding alternatives to foreclosure, the policy impact of the state’s new Homeowners Bill of Rights and the fact that many foreclosures have already been processed has resulted in a downward trend in foreclosure activity.
The trend includes the Los Angeles and Southern California markets, said Daren Blomquist, spokesman for the Irvine-based RealtyTrac, a company that lists foreclosed properties and collects real estate data. Blomquist said foreclosure filings in Los Angeles and San Bernardino counties have fallen for the past 21 and 15 months respectively.
The Homeowners Bill of Rights is a package of laws that state Attorney General Kamala Harris and Democratic lawmakers pushed for last year. The laws include several provisions to prevent or delay foreclosures, including a ban on “dual tracking” activities in which banks work on a homeowner’s loan modification request while simultaneously processing a foreclosure.
He also said banks became more willing to let homeowners pursue short sales — deals in which houses were sold for less than the outstanding mortgage debt.
Blomquist said the laws resulted in a sharp decrease in foreclosure activity from December to January, but he predicted that many foreclosures would be merely delayed — not prevented — by the new laws.
Home prices have appreciated rapidly this year. In August, California prices rose to $441,330, which was about 28 percent higher than prices from 12 months prior, according to the California Association of Realtors. The figure also signified the highest price recorded since December 2007.
Realtors are projecting the rate of appreciation to cool off next year. Scott Underwood, a Long Beach-based broker, said upward movement in mortgage rates has calmed recent conditions in which a house may get a rush of offers as soon as it goes on the market. That makes it easier for parties on either side of the deal to assess a fair price.
“Now, all of a sudden, there’s less of a frenzy and it’s easier to work in (and) conceptualize for buyers and sellers,” he said.
Courtesy of ProGroup Escrow and By Andrew Edwards, Press-Telegram