The housing market's long, cold winter may finally be heading into a springtime thaw.
New data show price declines easing in big cities, sales of new homes improving nationally and foreclosures in California dropping to levels not seen since before the start of the credit crunch nearly five years ago.
The easing of foreclosures is seen as key by many economists, since the glut of these properties being sold at a discount has been a significant drag on home prices.
"The foreclosure market is turning into a drought, not a wave, and that has resulted in a lack of inventory," said Sean O'Toole, chief executive of the firm ForeclosureRadar.com. "If it continues, it will likely mean that we've either seen a bottom â€” or have passed a bottom â€” in prices because of limited supply and still strong demand."
Home prices remain depressed from their peak in 2007, when the median-priced home in Southern California sold for $505,000. The median price last month was $280,000.
The economy overall has been improving, however, with unemployment, retail sales, corporate profits and other measures showing steady if unspectacular gains. Housing has been one of the last holdouts, but analysts note that prices have stabilized and sales volume has been gaining.
"What are important are sales and inventory, and those are pointing in the right direction," said Christopher Thornberg, a principal at Beacon Economics who was one of the early callers of the housing crash. "I would say that by the end of the year, they should translate into better prices."
Thornberg added, "The recovery is here."
Notices of default, the first step in the foreclosure process, fell to 56,258 statewide in the first three months of the year, a 17.6% drop from the same period last year, DataQuick of San Diego reported Tuesday. That was the fewest number of default notices filed since the second quarter of 2007.
Banks still retain many foreclosed properties on their books, and some analysts have predicted that housing prices could weaken again if lenders dump these properties into the recovering market. But O'Toole and other analysts see that long-feared "second wave" as increasingly unlikely, pointing out that the banks would be acting against their own interests by undercutting prices through a fire sale.
"A few years back, there were some breathtakingly negative forecasts making the rounds regarding the foreclosure problem," DataQuick President John Walsh said. "It's not necessarily playing out the way some pundits thought."
Low interest rates and the availability of bargain-priced properties are drawing more buyers into the market.
Bobbie Dunlap, 61, an office manager, said she recently bought a bank-owned home for $225,000 that she intends to fix up and rent out. The South Gate resident said she had to raise her price to beat competing bids on the two-bedroom property in Bellflower. She hopes that the rental income from the investment will provide her with a financial cushion when she stops working.
Help withÂ Any Real Estate Transaction - Buy or SellÂ
Call me 424-777-9377 -Â FREE CONSULTATION!Â
Should you have any questions - please feel free to call me Toll Free: 1-855-TRUST-55 (1-855-878-7855) Â ext. 777.
PresidentÂ - RealtorÂ®
- Trust Sale Realty -
Residential & Commercial Real Estate
Toll Free: 1-855-TRUST-55
Toll Free: 1-855-878-7855
- We Hire CA Licensed Real Estate Agents -