Bank owned resales make up smaller share of total market.
Properties that were foreclosed upon in the past year and resold in San Diego County made up 20 percent of total home resales in June, matching the recorded low in September 2007, DataQuick stats show. Their share of the resale market was 21.3 percent in May, 28.5 percent a year ago and had a peak of 55 percent 3½ years ago. In other words, bank-owned resales are making up a smaller share of the total market as time passes.
The shrinking inventory of foreclosure resales and the heightened demand for them likely has helped drive up the median home price in the county, said Andrew LePage, an analyst at La Jolla-based DataQuick. Foreclosures, which can be in poor condition, tend to be sold at a discount.
As their presence in the county continued to subside in the past six months, home values in San Diego County have either stayed relatively flat or crept up slowly.
“It has a significant impact on the market in how the market feels to buyers and sellers out there,” said LePage, referring to the latest foreclosure figure. “Buyers don’t have as many foreclosures to choose from, and sellers don’t have as many foreclosures to compete with.”
Even with a declining inventory of foreclosure resales, investors are still out in significant numbers. Investor sales comprised 27.5 percent of total sales in June, matching the percentage in May and up from 24.1 percent a year ago. They peaked in February, at 30.1 percent.
What kind of effect do investors have on neighborhoods?
It depends on your perspective and your neighborhood.
Investors, who typically snap up distressed properties because of their lower prices, may be doing areas a favor by rehabbing homes and selling them to first-time homebuyers who wouldn’t have the means to do the extensive rehabbing.
“It’s an ecosystem,” LePage said. “Investors are scavengers that pick up problem properties. If too many stack up, that has negative impacts on the way neighborhoods look and the quality of home values.”
On the flip side, stories have surfaced of investors crowding first-time buyers. Investors tend to have cash, and cash is more attractive to home sellers, LePage said.
“It depends on your perspective,” he added.
