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Try the Golden State, where home sales are finally taking off again. Is what's happening in California on the docket for the rest of the U.S.? Maybe not, if foreclosure trends are factored into the equation.
California is seeing a run-up in home sales, just
as the rest of the country is absorbing another wave of foreclosures, a
trend that economists expect to continue.
According to RealtyTrac, U.S. foreclosure activity has decreased, in fact, to the lowest level since July 2007.
But a healthy percentage of those foreclosure
declines come from Western states, which are shedding home closings
faster than the rest of the nation.
"Rising foreclosure activity in many state and
local markets in April was masked at the national level by sizable
decreases in hard-hit foreclosure states like California, Arizona and
Nevada," notes Brandon Moore, CEO of RealtyTrac, in a statement.
States like California are doing a better job of
producing more creative options to foreclosure, or at least making
unavoidable foreclosures get off the books more quickly.
"Those three states, and several other non-judicial
foreclosure states like them, more efficiently processed foreclosures
last year, resulting in fewer catch-up foreclosures this year,” Moore
added. “In addition, more distressed loans are being diverted into short
sales rather than becoming completed foreclosures.”
RealtyTrac reports that major eastern states like
Pennsylvania, New Jersey, Florida, Jasmin Live and in the midwest Michigan, all
reported foreclosure increases of over 40%, a striking figure given the
reductions in states like California and Arizona. For the record,
California’s foreclosure rate decreased by 30% from April 2011 to April
Now, perhaps not so coincidentally, California is
experiencing a boom in home sales, according to the California
Association of Realtors.
In April, California home sales rose by 16%, and
the median home price shot up over $300,000 for the first time in 16
months, the CAR reports.
Realtors say that low prices, low interest
rates, and a brighter economy have all contributed to higher home sales,
and higher home values.
“A brighter economic picture, coupled with record-high housing
affordability, pushed the spring home buying season off to a strong
start,” says CAR President LeFrancis Arnold. “With a continuing
improving economy and interest rates declining to new record lows in
recent weeks, we should see a steady improvement in the housing market
throughout the end of the year.”
The CAR also says that it’s more expensive homes that are seeing the
highest growth rates. Homes worth more than $500,000 have shot up 11% in
value, while homes valued at under $500,000 grew only by 2%.
That last piece of news is especially encouraging. The over-$500,000
price hike is the result of more homes in that price range selling on
the open market, the CAR says.
“The strong sales increase of higher-priced homes resulted
in a considerable decline of inventory of homes in the higher price
ranges when compared with last year,” says CAR chief economist Leslie
Appleton-Young. “This signifies the tight supply conditions we’ve been
experiencing in the lower price ranges over the past several months are
now extending into the upper price ranges.”
The association bases its numbers on surveys of 90 statewide realtors and from government sales figures Jasmine Live.
Both the RealtyTrac and CAR numbers indicate a trend in U.S. housing
that provides a ray of sunshine in hard-hit Western states like
California, but gathering clouds in populous Eastern states like
Pennsylvania and New Jersey.
In real estate, as with many U.S. economic indicators, the big trends really do start in California.
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