Bargains Meet Buyers, 2002 Pricing Triggers Sales Increase

Local real estate prices continued to retreat across most sectors in the first half of the year. But in a sign the market is trending toward equilibrium these cheaper prices—often at 2002 levels—were greeted by eager buyers. 

Sales of condominiums grew  in the first six months by 44% over the same period last year—to 162 units, while closings of single family homes ratcheted 150% higher to 40 transactions. 

The increase in both condo and home sales was paced by short sales–the lender accepting less than is owed, and REO’s—banked owned inventory. In 2009‘s first half not one home sale fell into those categories, whereas they accounted for 42.5% of transactions in the first half of this year. Short sales and REO’s totaled just 25 of 2009’s first half condo sales but ballooned to 59 closings in the same period this year.

Meanwhile, the median price of condos sold in the second quarter of  2010 eased to $316,000 from $367,500 for the same period last year. While the median price of homes sold in the second quarter slipped to $625,000 from $749,500 for the second quarter of ’09.

As attractive as real estate prices are these days my clients want to know where prices will be tomorrow. Are we doomed to a double dip recession? To high unemployment and an endless cycle of foreclosures? 

In Mammoth short sales and REO’s total just 18% of current condo inventory and a mere 5% of listed homes. In July the number of Californians behind on their payments dipped to a 3 year low. 

And yet nationally over 4 million households are at least 60 days overdue on their mortgages. It’s impossible to tell how many of these properties will hit the market in the months ahead. One thing is certain, in Mammoth, buyers are finding current price levels attractive.