Printer Friendly

HOUSING SALES COULD COOL TRACKER SEES THREAT IN INCOME DECLINE.

Byline: Gregory J. Wilcox Staff Writer

Rising prices and lagging incomes could pose a danger this year for Southern California's hot housing market, an Internet company that tracks foreclosure activity warned on Monday.

Sacramento-based Foreclosure.com, which monitors properties in financial distress, found that while foreclosures are down in Los Angeles and Riverside counties, ``we're seeing price growth in those markets that is just not sustainable,'' company President Alexis McGee said.

She characterized the 3.6 percent increase in Southern California's median resale home price between October and November as ``almost surreal.''

In contrast, personal income in California declined 0.5 percent during the 2002 third quarter from the first quarter of 2001, according to the latest economic forecast from UCLA's Anderson School.

``If we don't get a cooling-off period to let incomes catch up to prices, we're going to see prices turn around. That will squeeze homeowners with money problems even more, and foreclosure activity will increase again,'' she said.

This gloomy outlook actually drew a chuckle from John Karevoll, a real estate market analyst who tracks foreclosure activity for La Jolla-based DataQuick Information Systems.

``Saying that the price rise is unsustainable is wildly speculative,'' Karevoll said. ``That's one scenario, but it's not any more likely than others out there.''

Prices will continue rising this year, but not as much percentage-wise as they did last year, he said.

Instead of a 20 percent annual price gain, which likely happened from 2001 through 2002, this year the gain is expected to be 10 percent to 12 percent.

Mortgage rates will probably stay at their current level well into this year, offsetting price increases to some degree.

And buyers are not being put off by sticker shock in markets like the San Fernando Valley, where sales are still strong despite a median price that reached almost $330,000 by November.

``People base their purchase on what the cost of the home will be (in monthly payment), not the price,'' Karevoll said.

Since foreclosure activity is at an extremely low level now, it is certain to go up at some point.

And that might not be all bad.

``Foreclosure activity is a useful function in the marketplace. It mops up a lot of noise and distress. It's kind of the end station for an awful lot of economic activity,'' Karevoll said.

Officials at Foreclosure.com could not be reached for comment.

The company has been publishing property foreclosure information for about 10 years to help investors locate distressed homeowners who have run out of both options and time.

Investors can then snap up the property and help the distressed property owner conserve some equity.
COPYRIGHT 2003 Daily News
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2003, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:Business
Publication:Daily News (Los Angeles, CA)
Article Type:Statistical Data Included
Date:Jan 21, 2003
Words:442
Previous Article:TINSELTOWN SPYWITNESS.
Next Article:SEARCH AND DESTROY DREAMS DIE HARD ON TALENT SHOWS LIKE 'AMERICAN IDOL' - AND THEREIN LIES THE FUN.


Related Articles
Asset Tracker for Networks. (Network News And Products).
High-tech habitats. (Innovative Technologies).
HOME AFFORDABILITY SLIPS IN STATE, L.A.
SALES OF NEW HOMES SLOW.
COOLING SEEN IN HOUSING MARKET AS PRICES RISING.
HOMEBUYING COOLS DOWN A BIT HIGHER LOAN INTEREST, SEASONAL TREND FELT.
Kicker may pack $1 billion punch.
FLIPPING HOMES IN STATE DOWN PRACTICE AT LOWEST LEVEL SINCE 2003.

Terms of use | Copyright © 2018 Farlex, Inc. | Feedback | For webmasters