Foreclosures Fuel Some Buyer Hot Spots

Foreclosures Keep Powering Western Home Sales:

LOS ANGELES (AP) — Home sales across the Western region of the country posted an annual increase of nearly 4 percent in July as buyers snapped up foreclosures and first-time homeowners rushed to take advantage of a temporary tax credit, the National Association of Realtors said Friday.

Those fire-sale prices helped drag down the median home price in the West by 28 percent to $202,300.

”In the West, it’s still the economy that’s determining sales,” said Patrick Newport, an economist with IHS Global Insight, noting that the West was the only region to see a decline in sales from June levels.

That was largely a reflection of the job market. The West had a jobless rate of 10.5 percent last month, the highest of any region, the Labor Department said Friday.
”Since the economy is still getting worse, that’s offsetting this extra kick that you’re getting from lower house prices and the tax credit and low mortgage rates,” Newport explained.

Nationally, sales last month surged by nearly 6 percent from a year earlier, and showed a surprisingly large gain over June. Affordability is the reason — the national median price fell 15 percent to $178,400.

Despite the economic doldrums weighing on the West, many of the largest metros saw better sales last month than in July last year, according to The Associated Press-Re/Max Monthly Housing Report released Friday. The report tallies all home sales in the metropolitan statistical area by all real estate agents, regardless of company affiliation.
Phoenix, Las Vegas, Billings, Mont., Los Angeles, San Francisco, San Diego, Boise, Idaho, Portland, Ore., Anchorage, Alaska, and Albuquerque, N.M., registered an increase in home sales last month.

While Seattle, Honolulu and Denver each saw sales tumble in July from a year earlier, according to the AP-Re/Max report.

Home values plunged the deepest in Las Vegas, where the median sale price sank in July by more than 40 percent to $125,000. Sales climbed by nearly 50 percent, according to the AP-Re/Max report.

Rosa Herwick, a broker and owner of Century 21 JR Realty in Henderson, Nev., said her office handled nearly three times as many sales in July as it did in the same month last year.

The majority of Herwick’s clients are first-time buyers, but many cash-carrying investors continue pounce for bargain properties, often beating out other buyers on sales.
”They’re buying properties in the lower price ranges — $150,000 or less — and turning them into rentals,” Herwick said.

She expects her August transactions will be slightly lower than July, but ahead of last year.

”Our market is very hot and if you’re buying something less than $300,000, there’s multiple offers on everything,” Herwick said.

The inventory of homes in the Las Vegas market has been whittled down by more than 46 percent since July last year. And most of what’s out there are foreclosures or short sales when a seller asks the bank to take less than what is owed on the mortgage.
That’s also true, though to a lesser extent, in California, where Cindy Hanvey just landed a five-bedroom, three-bath house for $243,000, about $57,000 less than the previous owners paid for it.

The customer service representative had tried for a year to buy a foreclosure in San Diego only to lose out to other bidders. So she went after a short sale in Winchester, some 75 miles north. The paperwork took three months, she said, but was worth it.

”I feel like I definitely bought at the right time,” said Hanvey, 37. ”I’m hoping to stay in this home for the rest of my life, as long as we don’t lose our jobs or anything like that.”

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