Home prices have appreciated so well over the past five years, changing the landscape of California's distressed housing market. The share of distressed home sales on the market is now just a fraction of what it was during the Great Recession, according to the California Association of REALTORS®.
According to the C.A.R. report comparing the distressed housing market today and during the downturn in January 2009, 69.5 percent of all homes sold in California were distressed properties. Five years later, that figure has shrunk to 15.6 percent, due to the rapid acceleration of home prices. During the same time period, California's median home price has soared more than 64 percent from $249,960 in January 2009 to $410,990 in January 2014.
In January 2009, bank-owned properties (REOs) comprised 60 percent of all sales and short sales made up 9.1 percent of all sales. The share of short sales then rose to as high as 25.6 percent in January 2012. Short sales currently make up 9.2 percent of all sales statewide.
"This information shows that California's housing market is moving forward to the relief of many homeowners. Underwater mortgages have dropped sharply. During the downturn about 35 percent of homes in the state experienced negative equity. Today, that share has dropped to about 13 percent," said David Tonna, president of the Silicon Valley Association of REALTORS®.
The statewide share of equity sales hit a high of 86.4 percent in November 2013 and has been above 80 percent for the past seven months. They made up 85 percent of all sales in February 2014.
The rebound of equity sales is quite evident in counties that were hardest hit during the downturn. The distressed market in January 2009 was 93.6 percent in Stanislaus County, 93 percent in San Joaquin County, 89.5 percent in San Benito County, 86.1 percent in Kern County, 85.6 percent in Sacramento County, 84.2 percent in Fresno County, and 83.6 percent in Monterey County. The distressed market is now down to 24.8 percent in Stanislaus, 25.1 percent in San Joaquin, 17.5 percent in San Benito, 18.4 percent in Kern, 19.9 percent in Sacramento, 26.3 percent in Fresno, and 16.9 percent in Monterey counties.
Of the reporting counties, San Luis Obispo, Orange, Santa Clara, and San Mateo counties held the lowest share of distressed sales in January 2014 at 10.2 percent, 9.5 percent, 7.7 percent, and 6.8 percent, respectively. In January 2009, distressed sales amounted to 52.2 percent in San Luis Obispo County; 60.3 in Orange County; 68 percent, Santa Clara County; and 48.2 percent, San Mateo County.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
For further information, please email or call the SILVAR office at (408) 200-0100.