09:13 PM PDT on Monday, May 19, 2008

By LESLIE BERKMAN
The Press-Enterprise

Riverside County last month saw the first year-over-year sales increase since 2006, as bargain hunters streamed into a market rife with foreclosures.

While Riverside County was the only county in Southern California to log an April-to-April gain, sales surged throughout the region to the highest level since August.

Mark LePage, an analyst at DataQuick Information Systems, which on Monday released the monthly housing report, said the April numbers could signal that home sales in Southern California are close to hitting bottom, even though prices continue to slide steeply. "But we won't know for another three to four months," he added.
Sales are still historically low and LePage cautioned that the housing market could further weaken because of rising foreclosure activity, the possibility of recession-related job losses and a credit crunch that is hindering home financing.

"I call this a false dawn," said Chris Thornberg, an economist with Beacon Economics in Los Angeles. "Foreclosures are not a sign of a stable market. Prices are getting closer to affordability, but they still have some ways to go."

The report shows that prices make a difference, said Leslie Appleton Young, chief economist for the California Association of Realtors.

"It is just a little bit too early to call a bottom," she added.

The median price of homes sold in Riverside County last month dropped almost 31 percent to $283,500 from April 2007, and 33 percent in San Bernardino County to $248,000.

Real estate agents throughout Inland Southern California say since early this year they have seen a growth in home purchases, particularly by first-time buyers who now can nab a house cheap enough so their monthly mortgage payments are no more than what they have been paying in rent.

Cheaper Than Rent

Norm Reynolds, 38, is one of those buyers who decided not to wait for home prices to drop any further. The promotions manager at the KFRG radio station, said he is in escrow to buy a three-bedroom, two-bath house in the Canyon Crest neighborhood of Riverside for $260,000. That would make his mortgage payments $1,300, or $300 a month less than what he is paying in monthly rent on a nearby apartment.

"Right now it is definitely a buyer's paradise. You can have a low budget and find what you are looking for," said Reynolds, who is divorced and is eager to have a house with enough bedrooms and a backyard for his children when they stay with him.

Reynolds, like many others who are home shopping today, discovered that homes priced below $300,000 frequently attract multiple offers. With that knowledge, he said, he offered $4,000 above the list price for the bank-owned house that he bought.

Riverside and San Bernardino counties lead the region in foreclosures as a percentage of resale activity. Homes that had gone into foreclosure in the previous 12 months represented almost 53 percent of April resales in Riverside County and nearly 52 percent in San Bernardino County.

Meli Van Natta, a real estate broker with Prudential California Realty in Moreno Valley, said about 90 percent of the sales in her office are homes repossessed by lenders. She said in the price range up to $250,000, she sees fierce competition and multiple offers. She said in the last three weeks she has written seven offers for one of her clients, none of which were accepted. In one instance, she said, there were 20 competing buyers.

Pete Nyiri, owner of Top Producers Realty in Corona, said his closings have dramatically increased since December. He said buyers seem to be coming from "all over," including Los Angeles and Orange counties, with the vast majority looking for their first houses.

Sales have been spurred by legislation that raised the limit on mortgages insured by the Federal Housing Administration, Nyiri said. He noted that FHA mortgages require proof of income and good credit but are specially designed to accommodate first-time buyers.

Mortgage Availability

Delores Conway, director of USC's Casden Forecast, said although home financing opportunities have improved since the credit crunch began in August, most of the benefit has been for buyers of lower priced homes.

She said it is more difficult for prospective buyers to qualify for so-called "jumbo" mortgages, which are above $500,000 in Riverside and San Bernardino counties.

Bruce Norris, a Riverside-based real estate investor and consultant, said investors would also be buying more foreclosures if it weren't for increasingly restrictive lending qualifications.

Riverside County posted 3,186 homes sales in April, up 6.7 percent from a year earlier and showing the first year-over-year gain since March 2006.

San Bernardino County had 1,667 home sales last month, down about 19 percent from a year earlier but showing a nearly 9 percent increase from March.

San Bernardino County's housing could be trailing Riverside County in sales recovery because it is later in the cycle, having taken longer to see gains as the market skyrocketed, Le-Page said.

Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula