Sales picked up from July to August in 12 of 25 metropolitan statistical areas tracked by Radar Logic Inc., as heavy discounts on "motivated sales" pushed prices down in all but a few markets.
Part of the recent pickup in sales reflects an expected seasonal uptick in market activity at the end of the summer, Radar Logic said. But In California, Arizona and Nevada, deep price discounts associated with foreclosures appear to have attracted buyers.
Seven of nine markets that saw sales increase from a year ago were located in those states. The nine MSAs that saw sales pick up from a year ago were Sacramento (up 74.9 percent year-over year), San Diego (52.9 percent), Los Angeles (47.4 percent), San Francisco (32.9 percent), Washington, D.C. (30 percent), Las Vegas (29.5 percent), Phoenix (22.9 percent), San Jose (16.3 percent), and Minneapolis (3.3 percent).
Despite seeing a big increase in sales from a year ago, Los Angeles and Las Vegas saw transactions fall slightly from July to August.
St. Louis, Mo., saw the biggest decrease in transactions from July to August (down 15.7 percent) and year-over-year (down 43 percent), but remained the fourth-best performing market in year-over-year price appreciation (-4.2 percent).
Five markets where sales hadn’t bounced back to 2007 levels in August nevertheless saw sales pick up from the month before. Those markets were Boston (up 24.1 percent from July to August), Philadelphia (19 percent), Chicago (9.7 percent), Detroit (up 6.9 percent), and New York, N.Y. (0.2 percent).
Motivated sales — defined as liquidity-driven sales from financial insitutions, foreclosure service firms and foreclosure auction sales — accounted for a higher percentage of total sales in all 25 MSAs compared to a year ago. In Los Angeles and Phoenix, for example, motvated sales accounted for more than one in three transactions, compared with less than 10 percent a year ago.
Motivated sales as a percentage of total sales were also up from July to August in 19 of 25 MSAs.
The increase in motivated sales was one reason Radar Logic’s residential property index, or RPX, showed prices falling 18 percent in August from a year ago. Motivated sale prices were 28 percent below nonmotivated sales across the 25 MSAs.
At the MSA level, prices on sales not defined as motivated were also falling. In August, prices in nonmotivated sales in 18 MSAs had given back 50 percent or more of the appreciation achieved between January 2004 and their peaks.
All but two of 25 MSAs saw prices decline from a year ago in August, compared to the seven MSAs in July where year-over-year prices held steady or appreciated. From July to August, the 25-MSA composite showed priced falling 2 percent from July to August.
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