Debra Gruszecki • The Desert Sun • December 3, 2008
The median price of Coachella Valley homes fell 34 percent in October to $225,000, a level not seen since February 2003.
The year-over-year drop, credited largely to the high number of foreclosed properties on the market, drove sales up significantly, according to San Diego-based DataQuick.
It was the second consecutive sales hike of more than 30 percent since housing sales began to slump in 2005.
In October, there were 853 sales of new and resale houses and condos that closed escrow. That's nearly a 32 percent increase in home sales in a valley that strongly depends on real estate to fuel its economy.
In September, the 865 home sales closing escrow posted a 65 percent year-over-year hike, the strongest since January 1988.
“The rise in sales indicates that buyers continue to take advantage of bargains in the marketplace, as the inventory continues to trend upwards, and as more properties with troubled loans contribute to the number of properties for sale,'' said Greg Berkemer, executive vice president of the California Desert Association of Realtors.
Fifty-one percent of the homes that closed escrow in October across Southern California had been foreclosed on at some point over the year, according to DataQuick, which has provided The Desert Sun local housing data that dates back to 1988.
DataQuick spokesman Andrew LePage said the percent of all resales — existing homes and condos — in Riverside County that have been foreclosed on in the prior 12 months was even higher.
It stands at 67.7 percent, he said, explaining the “foreclosure problem is more severe in Riverside County.''
The percentage for the Coachella Valley was not reported, but local real estate experts note the percentage of foreclosed property in the Multiple Listing Service is in the range of 30 percent to 40 percent.
“We've had a huge jump in sales over the last two months, but we're seeing a market where foreclosures and short sales are bolstering the numbers,'' said Sam Schenkl, executive officer of the Palm Springs Regional Association of Realtors.
“I (also) think consumers are holding the better properties off the market until the spring.”
“Sellers ought not to conclude that the buyers' market is over,'' Berkemer said. “What it says is the market has generated a large number of properties at discounted prices.”
It also is playing out against a global backdrop of tough economic times, experts said.
The October sales predate the Wall Street roller coaster ride, bank failures, job losses and credit crunch.
“For the housing market to continue to recover, it will require good news from the general economy, banks loosening (their) credit, government assistance programs to take effect and a return of liquidity to the marketplace,'' Berkemer said.
Yet the brisk sales pace shows that buyers are responding to hearty stock of houses on the market at reasonable prices.
Most of the price reductions have taken place, and new properties coming in are matching the prices, Berkemer added, observing: “Buyers are in a good place.”