If you’re a first time home buyer in Los Angeles County, you’ve doubtless been looking for a bargain property in your local area. In many states, you have a wide selection of resources, including lender auctions, bank-owned inventory and Short Sales.
But according to data compiled by Inside Mortgage Finance – a company that polls over 3,000 real estate agents monthly – home sales to first-time homebuyers dipped significantly last month.
What Happened to the Housing Market in July 2010?
In July, first-time homebuyers accounted for only 39 %of the home purchases across the country. That number is down from the peak of 48 % in March and is at the lowest level seen since 2009. As predicted, the government’s initiative to stimulate home sales has worked, but as economists warned, sales slipped fairly substantially in the months following the tax deadline.
The surge in first-time buyer activity last March also came at the same time that the volume of distressed properties reached over 50 % of lender inventory, far above the distressed inventory low of 37 % recorded in November 2009, when loan modification programs and foreclosure delays significantly reduced lender inventory of distressed properties.
If this trend continues, first-time homebuyer activity could fall below 30% in the next few months. Clearly, the tax credit deadline has had a big effect on first-time homebuyer participation.
What Should First-Time Los Angeles County Homebuyers Be Looking for?
As a first-time homebuyer, you should be looking to the most popular forms of distressed home sale transactions – the Short Sale. Since March, short sales have accounted for more than 18 % of housing market inventory. If you choose the right property, you could even receive an almost 25 % discount on the current market value of the home.
With many LA County homeowners continuing to fall behind on their mortgages, and more distressed properties coming onto the market, as a first-time homebuyer you have an opportunity to swoop up the excess inventory.
Short sales remain one of the few bright spots in the residential housing market. With short sales’ time-on-market continuing to decline, from an average of just over 20 weeks in February to more than 15 weeks July, many first-time homebuyers purchased Short Sales in the last month. This activity will stabilize prices over the next few months, and hopefully more homeowners will focus on swooping up these distressed properties and positively affect the non-distressed housing market.
Should You Consider a Non-Distressed Property as Your First Home?
With non-distressed property prices still rising too quickly, you should be contacting a Short Sale Real Estate Agent, to explore your other options. As more REOs come on the market, non-distressed properties will continue to impact pricing into the fall.
If you need more information about the first-time homebuyer incentives and Short Sales in Los Angeles County, visit http://markshandrow.com/free-book/to download my book: Should I Short Sale My Home? The Homeowner’s Guide to Surviving the Worst Real Estate Market in History.
For questions about the book, feel free to email me at mark@shandrowgroup.com or call me at 562-364-9505.
Sincerely,
Mark Shandrow
Real Estate Broker
office 562-364-9505 ext 100
mark@shandrowgroup.com
Shandrow Group
3970 Atlantic Ave., 210
Long Beach, CAÂ 90807
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