Eager homebuyers were faced with low inventory, lending restraints, and reduced affordability for month of February. The month saw 14,027 units sold including resales houses and condominiums in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. This indicates a 3.1 percent drop in sales from January, a month that saw 14,471 units moved. Compared to February 2013 figures, February 2014 figures saw a 12 percent drop from 15,945 units.

The Southland sales numbers for February were 20.1 percent lower than the average number of sales for the month of February – 17,560 units – since 1988. Above average sales numbers have not been witnessed for any month for over seven years. The period of March through May should provide more insight as to why sales are stalling. Industry experts are still focusing on the lack of supply coupled with higher prices and mortgage rates. Affordable housing on the market is slim leaving some potential buyers to stall on purchasing a new home.

Foreclosure resales accounted for 6.8 percent of the Southland resale market for February. Absentee buyers, or buyers who are simply investors along with some second-home buyers, purchased 29 percent of Southland homes sold in February with a median sale price of $320,000. All-cash buyers accounted for 30.9 percent of home sales. Homes that were flipped accounted for 6.2 percent of total Southland homes sold in February.

There are reasons to remain hopeful that the market will be more welcoming for these stalled buyers. The economy continues to grow steadily, with more jobs appearing on the market. There are people who lost homes due to foreclosure and short sales that will be looking to buy again soon. Inventory is beginning to increase, despite new listing activity being slow, and new construction is increasing.

Source: http://www.dqnews.com/Articles/2014/News/California/Southern-CA/RRSCA140312.aspx