Los Angeles Repo Homes Sales Soar Due to Tax Credit
Sales of Los Angeles repo homes soared in September because of the high number of first time homebuyers who rushed to buy homes to beat the expiration of the federal $8,000 tax credit, according to the National Association of Realtors.
NAR also said that the rush to beat the expiration date occurred not only in Los Angeles, but also in other parts of California and the country. The association said that sales of existing homes nationwide in September soared by almost 24 percent from the lowest level of sales in January.
Home sales nationwide increased to an annualized 5.57 million rate, a substantial increase from the annualized rate of 5.1 million the previous month. Based on data from Thomson Reuters analysts, the annualized rate for September surpassed the 5.35 million predicted by economists.
Because of the rush to buy, the number of unsold residential units fell nationwide to 3.6 million, a drop of nearly 8 percent. The inventory was equivalent to a supply of eight months and marked the lowest supply since March 2007.
Analysts said that the competition for lower-priced foreclosure homes became fierce in foreclosure-hit cities such as Las Vegas and in regions like Southern California.
Broker Marty Rodriguez said that half of her sales transactions in September were low-priced Los Angeles repo homes and short sales. She said that her agents were oftentimes writing several offers for different properties to be able to purchase for just one buyer. She added that competition in the low price range was extremely fierce.
According to NAR, home sales grew in the West by 13 percent from the previous month. The association said that sales of foreclosure homes were high in the cities of Los Angeles, Las Vegas and San Diego.
NAR said that because of the still high number of foreclosure sales and short sales, the median home sales price in September dropped by nearly 9 percent compared to the median last year and to the median in the previous month. The median price dropped to $174,900, a substantially lower price compared to $191,200 in September last year and $177,300 in August.
However, housing analysts said that home price declines have slowed over the past several months and that home prices could bottom out in the last months of the year. They added that prices will not increase significantly until the employment situation recovers.
