REAL ESTATE: Home sales market still sluggish

Home sales are generally expected to increase when the holidays appear in consumers’ rear-view mirror, but the activity recorded in March does not add up to much movement in residential real estate, a report released Tuesday found.

In fact, fewer homes changed hands in Inland Southern California last month than in March 2011, according to the report from DataQuick, a San Diego-based real estate tracking firm. There were 3,756 houses and condominiums sold in Riverside County last month and 2,544 sales in San Bernardino County,

Overall that’s a decline of about 2 percent from March 2011. Late winter and early spring is considered one of the peak seasons for home shopping.

Across Southern California’s six counties, sales were 2.8 percent higher than March 2011. Orange County saw a healthy 9.2 percent jump, and the two Inland counties were the only ones that did not match the 2011 sales total.

John Walsh, president of DataQuick, called the year-over-year gains “modest.”

“The year is young and lots could still change, but the results from the first big sales month of 2012 suggest the market is stuck in low gear,” Walsh said in an emailed statement. “This remains a very gradual — not to mention fragile — recovery.”

Median sales prices in Inland Southern California have fluctuated very little in the last two years. The median price of a Riverside home that changed hands in March was $198,000, and $150,000 in San Bernardino County. Median prices, where half the sales were higher and half lower, increased from February to March by about $16,000.

The median prices for both counties are well less than half of where they were at their peaks in late 2006.

Real estate analysts and people who work in the field say that banks and other lenders that have taken over foreclosed properties are reluctant to sell them, which is slowing up sales. DataQuick spokesman Andrew LePage said that in March 2011, 49.5 percent of all sales in San Bernardino County were foreclosures, and 44.8 percent in Riverside County.

But in March 2012, that was down to 44.2 percent in San Bernardino County and 38.9 percent in Riverside County.

Jane Blesch, owner of Blesch & Associates Trademark Properties, a Redlands-based brokerage, called the market “slow as molasses” right now, and said the banks, by holding onto properties, are not helping.

“You have to do a lot of footwork to get a sale done.” Blesch said. “There’s not a lot of good stuff out there, especially in the lower price range.”

DataQuick’s figures are based on sales that closed and were recorded at county courthouses in March, meaning that the data reported Tuesday was for deals mostly signed around the first part of February. Rich Simonin, co-owner of Westcoe Realtors in Riverside, said that sales have actually picked up since then, at least in Riverside.

But Simonin agrees that there is not enough inventory.

“The banks have still not put many of their foreclosures on the market. We don’t even know where they are,” Simonin said. “I’ve stopped trying to figure the banks out.”

He added that he thinks there’s a market for these properties, including individuals who want their own homes and investors who see properties as rental opportunities.

“Plenty of people want to take advantage of the low interest rates and prices,” Simonin said. “I think it’s a healthy mix.” Steve Johnson, Riverside director of MetroStudy, a real estate consulting firm, said banks and other lenders are being cautious. There are government programs in the works to allow homeown

ers to reset loan terms under certain conditions, and the banks are also developing pools of properties for investors. “They’re waiting to see if these programs will have an effect,” Johnson said.

Esmael Adibi, chief economist at Chapman University, said it wasn’t surprising that sales in the Inland area were lagging, and he said it was a matter of consumer demand. People who have gone through a foreclosure or a short sale in the last few years have damaged their credit scores, and that won’t improve for at least a few years. That puts these people on the sidelines, he said

Also, the job market, despite an encouraging six months, has been slower to recover in Riverside and San Bernardino counties than other areas, especially Orange County. Unemployment in the Inland area was at 12.5 percent in the Inland counties in February, compared to 8 percent in Orange County.

“There needs to be meaningful job creation and a sharp decline in the unemployment rate,” Adibi said. “It will be a gradual process, but we need to see renters with decent credit get decent jobs.”

Source: http://www.pe.com/business/business-headlines/20120417-real-estate-home-sales-market-still-sluggish.ece