Home sales in Southern California took a beating in July, the LA Times reported Tuesday. The following are a few additional housing-related nuggets from the article:
- Median home values for all of Southern California dropped 1.6% from June to $295,000 but are up 10% from a year earlier.
- The rate of foreclosure sales has remained flat for the past few months at around 33% to 35% of sales.
- Almost 22% of July sales were to real estate investors.
- Record low rates are failing to significantly spur home demand (maybe because financing is tough to come by?).
- Inventory is increasing and has nearly doubled since February.
With the economy still struggling, we can probably expect foreclosures to continue at high levels for the foreseeable future, and as that inventory enters the market, we probably will see added pressure on home prices. If the government wants to turn around the housing market, one way it could do it is to offer very favorable financing terms for investors. With 22% of sales in July, investors are creating a significant amount of demand in this market. Government should embrace and support the part of the market that’s actually working right now.
-CH
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