Repo Homes Are Not Cheap Everywhere in Southern California

by Peter Vernon on Repo Homes

The media’s description of the glut of foreclosed homes evokes images of thousands of cheap repo homes available for picking by homebuyers looking for their dream investments or homes. But to the surprise of Southern California homebuyers, there are not many bargain-priced repo homes available and there are too many buyers competing for a few attractively-priced repo homes.

Especially in areas such as Santa Monica, Pasadena and Culver City, demand exceeds supply in the bottom market for repo homes.

Real estate agent Christopher Hain has an explanation why many homebuyers are unable to buy homes in a market supposedly overloaded with cheap repo homes. He contends that buyers are not increasing their bids because they are afraid the market has not bottomed out and they could be paying too much.

Burt Slusher, a real estate investor, observed that many buyers are offering unrealistically low bids. He suggested that home buyers should focus on inventory of existing homes and repo homes in fine areas.

Another agent, Phyllis Harb, complained that many home buyers are relying too much on published housing statistics, attending open houses and then making offers 20 percent below the asking price.

According to research service MDA DataQuick, around 20,000 houses in Southern California were sold in March, with most of the sales occurring in San Bernardino and Riverside counties, where large numbers of California foreclosures occurred. Across Southern California, sales of repo homes comprised 55 percent of total home sales deals in March.

In Los Angeles County, the cheaper homes, including repo homes, dominated sales in March, with 2,871 houses priced under $300,000 sold.

For houses priced over $1.2 million, there were only 202 units that got sold.

For the middle range – homes priced between $400,000 and $800,000, less than 25 percent of total deals were sold.

Among frustrated Southern California homebuyers are Silver Lake pizza business owners Bunny and Nicky DeMarinis. They said they have inspected about 50 homes already, but they have not bought one. They made a $1 million offer for a conventional house in Los Feliz, but despite lots of repairs that need to be done on the property, the seller refused to budge from the $1.7-million listing price.

Real estate agent Tracy King said that prices of homes, including repo homes, are extremely local, and that a published regional median price does not have an effect on local prices.

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