Foreclosures Up, Median Prices Down

The title of a North County Times article from Wednesday says it all: “Foreclosures hit new highs.” According to the article, “The number of foreclosures sold in the county during December leapt 328 percent from the previous year to 1,096, comprising 45 percent of all sales, according to data from a report by ForeclosureRadar…”

North County Times interviewed Professor Norm Miller of the University of San Diego who claims a healthy foreclosure rate is near 1 or 2 percent and until the percent of foreclosures drops, the housing market will not recover.

The article discusses the whole buying low and selling high (or a little bit higher) with foreclosures. The number of foreclosures sold at auctions “valued at about $5 billion… statewide in December. So far, about $3.5 billion has moved in January…”

And while foreclosures are on the rise, the Union Tribune reported on Tuesday that median home prices in Southern California have sunk more than 13% to the lowest level in almost three years. The article covers six counties: LA, Orange, San Diego, Ventura, Riverside, and San Bernardino. The average median home price in these counties was $425,000 last month (lowest since early 2005). This represents a 15.8% peak from last spring with a median price of $505,000. Additionally, “Home sales in the region dropped 45.3 percent to 13,240 from a year ago to the lowest sales total for any December in the 20 years that [DataQuick] has been keeping track.”

To be San Diego specific, another Union Tribune article, also from Tuesday, reported “last month’s median price at $430,000 [was] 17 percent below the November 2005 peak of $517,500.”

The Tribune interviewed Mark Schniepp of the California Economic Forecast who claims now is the time to buy: “I think there is a window of opportunity that will exist between now and summer… Interest rates are only going to fall. The credit crunch is going to get better. There is going to be plenty of inventory. We are not going to have a recession.” Some pretty affirmative words for a pretty unstable market.

On the flip side, The Tribune also interviewed Christopher Thornberg, co-founder of Beacon Economics, who is much more a pessimist: “Sure, it’s a good time to buy if you don’t mind losing 10 to 15 percent of the sales price… There’s no recovery in 2008, no bottom in 2008. Prices are falling at a pretty rapid pace and will continue to fall through 2008 and into 2009, and that’s the most critical thing to keep in mind.”

Up and down, up and down… does any feel like we’re on a roller coaster here?

Recent Sweet Digs Posts:

Affordable Housing in East County

Hot Deals and Downright Steals (You’re Gonna Get Busted!!)