By Steve Cook
RISMEDIA, September 22, 2012—
The state that gave America Alt-A loans, the first tidal wave of foreclosures, the highest prices during the boom and the fastest fall during the bust is now leading the nation out of the six-year housing depression.
In the second quarter, California replaced Florida as the state dominating REALTOR.com®’s quarterly list of top turnaround towns. In the first quarter of 2012, seven Florida markets and one California market made the top 10 positions in the Realtor.com® ranking. Just one market in Florida and six in California now dominate the first 10 positions.
Leading economists like Clear Capital’s Alex Villacorta now describe the West, led by California, as leading the recovery beyond its first phase.
“Now at the start of a more advanced recovery, mid and top tier price segments in the West reported yearly gains in July of 5.0 percent and 2.7 percent, respectively. These gains indicate the buyer pool in the West has expanded beyond the segment focused on investment opportunities in low tier homes, to the owner occupied segment purchasing higher priced residences,” wrote Villacorta in Clear Capital’s July market report.
The California Association of REALTORS® reports prices continued to improve, with the median home price posting both month-over-month and year-over-year gains for the fourth consecutive month in June. June’s price rose 1.3 percent from a revised $316,410 in May and 8.1 percent from a revised $296,410 recorded in June 2011. The June 2012 figure was 30.7 percent higher than the cyclical bottom of $245,230 reached in February 2009. The median price has posted above the $300,000 level for the third straight month after remaining below that mark for 15 months.
Major California markets have cut inventory dramatically, reduced REOs and now are witnessing growing demand and improving prices. REOs are down 41.7 percent from last year, according to Foreclosure Radar, and short sales are up. In Sacramento, for example, 54.4 percent of all resales (single family homes and condos) were distressed sales. This was up slightly from 54.2 percent last month, and down from 61.3 percent in July 2011. The percentage of REOs fell to 22.4 percent, according to the Sacramento Association of REALTORS®.