LOS ANGELES – Investors and first-time buyers, often bidding against each other for foreclosed properties, continue to propel home sales in the West, according to two reports released Wednesday.
In the 13-state region, sales of previously occupied homes posted an annual increase of 16 percent last month, without adjusting for seasonal factors. Nationally, sales rose slightly from March to April, but were roughly 5 percent below year-ago levels, the National Association of Realtors reported.
The reason sales are so strong in the West is simple: foreclosures and distressed sales have dragged the median price down almost 22 percent, to $222,600, from last year. That’s the biggest drop in any region and helped pull the national median down more than 15 percent to $170,200.
The worst-hit Western cities include Phoenix, Las Vegas, San Francisco and Los Angeles, where prices were down more than 35 percent, according to the Associated Press-Re/Max Monthly Housing Report also released Wednesday. The report tallies all home sales in the metropolitan statistical area, regardless of company affiliation.
Floyd Scott, broker-owner of Century 21 Arizona-Foothills in Phoenix, said roughly 70 percent of the sales he’s seeing are distressed.
“That’s going to change, because we’re running out of inventory,” he said, adding that bank-owned properties are down to 40 percent of available inventory in the Phoenix area from 70 percent in January.
The median sales price in Phoenix was $115,000 in April, down about 46 percent from a year ago, according to the AP-Re/Max report. Transactions, on the other hand, were up almost 80 percent.
A lot of investors are swooping in with cash offers, says Ben Coleman, broker-owner of Century 21 Hartford Properties in San Francisco. About half of his buyers are investors and the other half are first-time home buyers.
The more expensive homes, however, are selling slower because interest rates and down payment requirements are higher for so-called jumbo loans over $730,000.
“Jumbos, that’s where we’re really feeling the pinch,” Coleman said. “We’ve got properties pushing $1 million or above that are sitting because you don’t have buyers that are qualified to be able to push those loans through.”
On the flip side, prices are only down less than 6 percent in Anchorage, Alaska, Albuquerque, N.M., Billings and Denver. Sales in those cities, by contrast, are down almost a quarter or more from April last year, according to the AP-Re/Max data.
In Seattle, the market is hot for homes priced below $400,000, and more buyers are taking advantage of the Federal Housing Administration’s rehab loans, which includes funds for home repairs, provided the improvements will justify a higher appraisal that meets the loan amount, says local real estate broker Duane Hopper.
Sales in Seattle were down about 33 percent from April last year, but up slightly from March. The median was $299,925, off 14 percent from year-ago levels. Still, with activity increasing, Hopper says that April “felt a bit like there’s a light at the end of the tunnel.”
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