DQNews Archived Article

Fewer Homes Sold At A Loss

by Real Estate Analyst John Karevoll
August, 1996

La Jolla, CA.— Fewer California homeowners are taking a loss when they sell their homes, providing further indication that the state‰s beleaguered real estate market is in a steady, although slow, recovery, a real estate information service reported.

 In July, 27.9 percent of all home sellers sold their homes for less than they had bought them for. That was down from June‰s 28.4 percent and down from 31.3 percent for July a year ago, according to DataQuick Information Systems. July‰s 27.9 percent was the lowest since 27.1 percent for February 1992. It was well below the peak of 42.7 percent that occurred in September 1993.

During the first seven months of this year, 29.9 percent of the state's home sellers took a loss, down from 32.0 percent for the same period last year (see chart), the company reported. " We thought the loss percentage might go up because of this year‰s sales increases. A lot of today‰s seller-buyers are concluding that what they lose at one end of the deal, they make up at the other end," said Donald L. Cohn, DataQuick CEO. " Home sales have been strong this year because of the recovering economy and the reasonable prices and interest rates. Now that home prices have bottomed out and are going up in some areas, taking a loss should be even less of a problem," he said. DataQuick monitors all real estate activity nationwide and provides information to lending institutions, title companies, industry analysts and consumers. The numbers include all " arms-length" resale condo and house transactions where current and prior sales prices were available.

Loss sales are most common in areas where a lot of new homes in the "move-up" category were built and bought during the sales and price boom of 1988-1991. So far this year, 43.2 percent of the sellers in Orange and Ventura counties have taken a loss. The lowest loss ratios can be found in areas where prices are increasing, or where housing stock is older and length-of-ownership is longer. Home prices in Santa Clara County are going up at the fastest rate in the state and the county has the state‰s lowest loss rate at 13.0 percent. In San Francisco 13.6 percent of all sellers take a loss.

Percentage of homes sold at a loss Jan-Jul 1995 and 1996

County	YTD 1995	YTD 1996
	%	%
Los Angeles	29.7	24.9
Orange County	44.9	43.2
San Diego	41.5	36.3
Riverside	33.2	32.4
San Bernardino	35.1	36.6
Ventura	40.5	43.2
So.Calif. Total	35.7	32.8
San Francisco	19.6	13.6
Alameda	27.4	24.5
Contra Costa	31.3	32.6
Santa Clara	24.2	13
San Mateo	18.2	16.3
Marin	13.9	21.2
Solano	35.4	42.2
Sonoma	25.4	29.7
Napa	26.7	27.9
Bay Area Total	26	23.4
Santa Cruz	20.3	15.6
Santa Barbara	21.7	27.2
San Luis Obispo	21.5	27.2
Monterey	16.9	19.5
Coast Total	19.8	21.6
Sacramento	37.3	35.5
San Joaquin	31.5	30
Placer	36	34.2
Kern	25.8	23.5
Fresno	18.4	25.4
Madera	8.4	10.7
Merced	23.5	27.1
Tulare	15.1	10.6
Yolo	40.9	29.8
El Dorado	22	24.7
Inland Total	28.7	28.4
All California	32	29.9

Source: DataQuick Information Systems

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

Copyright © 1996 DataQuick Information Systems.
All rights reserved.