DQNews Archived Article

California Homes Being Sold at a Loss

by Real Estate Analyst John Karevoll
June, 1995

La Jolla, CA.— Fewer California homes are being sold for less than they were bought for, indicating that many potential sellers have decided to stay where they are, a real estate information service reported.

In 30.7 percent of all May home sales, sellers ended up getting less for the home than what they had purchased it for. That loss percentage was down from 32.4 in April and down from 35.4 in May last year, DataQuick Information Systems reported.

Loss sales accounted for a steadily increasing portion of the market from early 1991 until a peak of 42.7 percent was reached in September 1993.

Large newly-built homes that were bought during the 1989 to 1991 sales surge have been particularly exposed, but the problem has spread into other categories as well, said Donald L. Cohn, DataQuick CEO.

" A lot of homeowners have put off selling during the past few years because of declining prices. So a higher percentage of those homes that were put on the market, were put there because the owner was under the gun to sell for one reason or another ". Many of these 'have-to-sell' situations result in a loss.

" We may find it shocking that three of ten sellers lose money, but we need to remember that it still means most people are making money, " Cohn said.

DataQuick monitors all real estate purchasing, financing and foreclosure activity in California and other states and provides information to lending institutions, title companies and industry analysts. The numbers include all " arms-length " resale condo and resale house transactions where current and prior sales prices were available.

The median loss was $23,500 on a house sold for $203,000, originally purchased for $226,500.

Hardest hit were homes in areas that experienced the fastest run-up in prices in the late 1980s. In Orange County, loss sales accounted for 45.3 percent of the last three month's sales (see chart), in Ventura County it was 38.0 percent.

Resale houses
Sales counts & loss percentages

March-May 1994 and 1995

	Mar-May	Loss	Loss
County	All Sales#	Pct. 95	Pct. 94
Los Angeles	18,217	31.8 pct.	38.2 pct.
Orange County	5,705	45.3 pct.	49.9 pct.
San Diego	5,803	42.6 pct.	44.9 pct.
Riverside	4,208	35.6 pct.	32.1 pct.
San Bernardino	4,266	35.5 pct.	30.8 pct.
Ventura	1,945	38.0 pct.	58.4 pct.
So.Calif. Total	40,144	37.0 pct.	40.9 pct.
San Francisco	1,026	16.2 pct.	24.0 pct.
Alameda	2,828	27.0 pct.	24.4 pct.
Contra Costa	2,486	32.4 pct.	34.5 pct.
Santa Clara	3,650	22.0 pct.	28.9 pct.
San Mateo	1,353	19.8 pct.	30.0 pct.
Marin	526	13.5 pct.	15.3 pct.
Solano	769	31.1 pct.	35.6 pct.
Sonoma	1,099	26.7 pct.	26.2 pct.
Napa	209	9.5 pct.	22.3 pct.
Bay Area Total	13,946	25.0 pct.	28.5 pct.
Santa Cruz	298	12.6 pct.	19.6 pct.
Santa Barbara	440	20.1 pct.	30.9 pct.
San Luis Obispo	393	12.9 pct.	28.6 pct.
Monterey	391	14.9 pct.	21.8 pct.
Coast Total	1,522	16.0 pct.	24.8 pct.
Sacramento	2,357	35.7 pct.	37.3 pct.
San Joaquin	931	38.8 pct.	31.9 pct.
Placer	562	36.2 pct.	37.3 pct.
Kern	1,142	26.7 pct.	14.3 pct.
Fresno	1,154	14.9 pct.	15.9 pct.
Madera	152	5.0 pct.	8.8 pct.
Merced	259	17.3 pct.	22.1 pct.
Tulare	563	15.0 pct.	11.7 pct.
Yolo	226	38.2 pct.	23.9 pct.
El Dorado	301	12.6 pct.	20.7 pct.
Inland Total	7,647	27.9 pct.	26.0 pct.
All California	63,259	32.2 pct.	35.3 pct.

Source: DataQuick Information Systems

For more information call John Karevoll (909)867-9534

Copyright © 1995 DataQuick Information Systems.
All rights reserved.