7 of 10 Sacramento Home Sales are Distressed Properties

Joel Singer, executive vice president of the California Association of Realtors, said that as painful as it is, all this housing distress has one advantage… Affordability,

Addressing the over 1500 Realtors that attended the annual CAR convention held this week in Sacramento, Singer said that today’s statewide median, skewed by high numbers of bank repos and other distressed listings, is now at $256,700. a huge, almost surreal drop from the nearly $600,000 in the recent boom.

“That affordability, in itself, will help cure this problem in the future if we can maintain it,” said Singer. “It also makes California, in my book, a more competitive place, something we all need in terms of long-term economic growth.”

Singer told agents from all over the state to expect more distress, even though he sees a “bottom forming”, especially in the low-end market. He thought the higher-end market was still declining.

News form other sources confirm this; research shows that inventory of homes priced under $500,000 has shrunk to a three-month supply at current rates of sale while the supply of million-dollar homes has expanded to 17 months.

With many local markets’ median prices still declining, California remains “uncharted territory,” he said. Singer said nearly nine in 10 homes sold in Solano County this March were bank repos, short sales or had some kind of financial distress. Sacramento County was only a little  better, with seven in 10 sales being distressed homes.

Distress sales have caused the squashed  prices, but have also killed commissions, even as sales have risen.

“If you look at the dollar volume of housing transactions, why does it still feel so bad when sales are twice what they were? It’s because the dollar volume of housing contracted by 53 percent. If you’re getting half of what you made in the peak year of 2005, you’re beating the average, and that’s why you feel so bad. That’s why I am so impressed that there are so many of you still here. Most industries don’t survive a 50 percent downturn.”

 

 

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