Foreclosures are the place to be. Low-priced, bank-owned homes are selling briskly, says market research firm MDA DataQuick. Newly-built homes, on the other hand, are sitting on the sidelines.
Home sales were up 50% year-over-year in Southern California in December for a total of 19,900. It was still the 5th slowest December on record. In some counties 70% of sales were foreclosures. Only 1,800 of the homes sold were newly-built ones—the lowest number in the company’s statistical database.
“The builders are in a holding pattern, staying alive until the market recovers,” says John Walsh, MDA DataQuick president. The most active lenders to Southern California home buyers were Countrywide, Bank of America and Wells Fargo.
The median price paid was $278,000 last month. In mid-2007 it was $505,000.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.