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Southern California Home Sales Lowest Since 2008

home sales

Southern California home sales stuttered last month, though investors and cash-buyers continued to make bets on an eventual recovery, according to a report from DataQuick.

The company said 14,369 new and resale homes and condo sold in February, down 0.6 percent from January and 6.4 percent from a year earlier.

It was the slowest February since 2008, and the second-slowest since 1995 – last month’s sales were also 19.5 percent short of the 17,848 home sale average for February, which goes back to 1988.

And the 847 newly built homes sold in the Southland last month was the second-lowest level on record for a February, behind the 842 sales seen a year earlier.

Essentially, builders aren’t able to compete with prices on resale homes, namely distressed properties such as foreclosures and short sales.

Last month, these types of transactions accounted for “well over half of the resale market,” though foreclosure resales are grabbing a smaller share than last year.

Surprisingly, short sales made up nearly 20 percent of resales last month, despite the cumbersome process associated.

Cash Buyers Grab Record Share of Home Sales

Meanwhile, cash buyers accounted for a record 31.7 percent of February’s home sales, the highest share of any month in DataQuick’s stats that go back to 1988.

The median price paid was $200,000 for cash buyers and $275,000 for buyers overall, up 1.9 percent from $270,000 in January and unchanged from a year ago.

FHA loans accounted for 32.2 percent of all mortgages used to purchase a home last month, jumbo loans were used 15.6 percent of the time, and 7.8 percent of buyers took out adjustable-rate mortgages.

DataQuick president John Walsh noted in the release that if the stars align, meaning low prices, low mortgage rates, job growth, and available credit, home sales could get back on track this spring.

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