Hopes for recovery are getting rekindled in Sacramento because of several positive signs in March and April, including increased sales volumes from foreclosed listings in March.
According to research by housing research firm MDA DataQuick, 67 percent of the 2,092 previously-owned single-family homes and condos sold in Sacramento in March were from banks’ foreclosure listings, an increase of 8.5 percent from 2007.
Homes in foreclosure listings have become the focus of competition between first-time homebuyers and investors, as foreclosure listings have been diminished by an increase in buyers compared to last year. Home buyers are rushing to buy because they are seeing signs of home prices nearing the bottom level.
Sales of existing houses and homes listed in foreclosure listings are also rising in other major cities battered by the foreclosure crisis, including cities in Florida and California. Sales of homes in Las Vegas increased by 35 percent in March, compared to the same month last year.
Andrew LePage, analyst for MDA DataQuick, said the signs are fragile, but if historical data is reviewed, current market signs are those that usually occur six months before home prices reach their bottom level.
The other positive market sign is the impact of pending home sales index from the National Association of Realtors on stock indexes on Monday. The S&P 500 index increased by 3.4 percent to 907.24 points, after falling on March 9 by 25 percent.
A total of 28,898 have been added to foreclosure listings in Sacramento since 2005. Sales of higher-priced properties in foreclosure listings remain slow, but bargain-priced properties are being snapped up quickly. One major problem for higher-priced properties in foreclosure listings is lack of financing, as mortgage lenders tighten their lending policies.
What is driving the Sacramento market is the attractive pricing of properties in foreclosure listings. The case of Chris and Rebecca Whitman illustrate the frenzy of buying and selling of foreclosed homes in Sacramento.
In just two months, the Whitmans have examined 100 houses, almost all included in foreclosure listings. They made offers on 20 homes, but did not get replies, as banks preferred cash from investors than loan transactions with individual homebuyers.
Initially, the Whitmans’ price range was $200,000, but when they could not get back replies from their offers, they increased their range. In April, the couple finally purchased a three-bedroom house listed in foreclosure listings for $224,500.
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