Foreclosed list sales increased again in Santa Clara County, California in September, based on data from a real estate research firm based in San Diego.
Sales of foreclosed homes and condo units accounted for 27.2 percent of total housing units sold in September, an increase from 26.4 percent in August. The 27.2-percent share remains a record high, as double-digits figures were never reached in the 1990s when the housing market also suffered difficulties. In September 2007, the share was only 3.9 percent.
According to analysts in the area, the level of foreclosures is still high because of unemployment, negative equity and the inability of homeowners to get loan modifications.
Meanwhile, overall house sales in Santa Clara in September climbed up by 17 percent compared to the same month last year. Analysts cited low loan rates and the expiration of the federal tax credit as the major factors for the increase in sales.
The total number of homes sold in September was 1,307 units, an increase from the 1,116 units sold in the same month last year.
The median home sales price in September dropped by 8 percent to $506,000 from the $550,000 median price last year. According to realtors in the area, the drop in the median was driven by the higher number of lower-priced homes and the high proportion of foreclosed list sales.
The median home sales price in the San Francisco Bay Area also dropped last September, with home sales increasing in most areas of the Bay Area.
Several mortgage brokers said the California market is difficult to label now because of different trends in various areas, with some markets soaring in sales and the others still drowning in foreclosures.
Narbik Karamian, a mortgage broker in Los Gatos, said foreclosures remains high in many areas and the number of non-owner-occupied homes is above normal levels.
Another analyst, Matt Anderson, who works for Oakland-based economics research firm Foresight Analytics, said that among the key reasons for the increase in sales is the drop in mortgage rates. He predicted that home sales in October and in November will increase as well.
The analysts however agree with the contention that all sales projections depend on how fast the economy is going to recover and how effective job creation efforts will solve the unemployment problem. All of them reiterated that although home affordability has been improving, foreclosed list sales will still dominate the market if the unemployment issue is not addressed.
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