History Repeats Itself, especially in San Diego Real Estate. The following is from the DataQuick 1995 archives. This was nine years ago, it will happen again, it is the natural order of the RE cycle. Be patient.
DQNews Archived Article
California Homes Being Sold at a Loss
by Real Estate Analyst John Karevoll
June, 1995
La Jolla, CA.— Fewer California homes are being sold for less than they were bought for, indicating that many potential sellers have decided to stay where they are, a real estate information service reported.
In 30.7 percent of all May home sales, sellers ended up getting less for the home than what they had purchased it for. That loss percentage was down from 32.4 in April and down from 35.4 in May last year, DataQuick Information Systems reported.
Loss sales accounted for a steadily increasing portion of the market from early 1991 until a peak of 42.7 percent was reached in September 1993.
Large newly-built homes that were bought during the 1989 to 1991 sales surge have been particularly exposed, but the problem has spread into other categories as well, said Donald L. Cohn, DataQuick CEO.
” A lot of homeowners have put off selling during the past few years because of declining prices. So a higher percentage of those homes that were put on the market, were put there because the owner was under the gun to sell for one reason or another “. Many of these ‘have-to-sell’ situations result in a loss.
” We may find it shocking that three of ten sellers lose money, but we need to remember that it still means most people are making money, ” Cohn said.
DataQuick monitors all real estate purchasing, financing and foreclosure activity in California and other states and provides information to lending institutions, title companies and industry analysts. The numbers include all ” arms-length ” resale condo and resale house transactions where current and prior sales prices were available.
The median loss was $23,500 on a house sold for $203,000, originally purchased for $226,500.
Hardest hit were homes in areas that experienced the fastest run-up in prices in the late 1980s. In Orange County, loss sales accounted for 45.3 percent of the last three month’s sales (see chart), in Ventura County it was 38.0 percent.
Resale houses
Sales counts & loss percentages
March-May 1994 and 1995
Mar-May Loss Loss
County All Sales# Pct. 95 Pct. 94
Los Angeles 18,217 31.8 pct. 38.2 pct.
Orange County 5,705 45.3 pct. 49.9 pct.
San Diego 5,803 42.6 pct. 44.9 pct.
Riverside 4,208 35.6 pct. 32.1 pct.
San Bernardino 4,266 35.5 pct. 30.8 pct.
Ventura 1,945 38.0 pct. 58.4 pct.
So.Calif. Total 40,144 37.0 pct. 40.9 pct.
San Francisco 1,026 16.2 pct. 24.0 pct.
Alameda 2,828 27.0 pct. 24.4 pct.
Contra Costa 2,486 32.4 pct. 34.5 pct.
Santa Clara 3,650 22.0 pct. 28.9 pct.
San Mateo 1,353 19.8 pct. 30.0 pct.
Marin 526 13.5 pct. 15.3 pct.
Solano 769 31.1 pct. 35.6 pct.
Sonoma 1,099 26.7 pct. 26.2 pct.
Napa 209 9.5 pct. 22.3 pct.
Bay Area Total 13,946 25.0 pct. 28.5 pct.
Santa Cruz 298 12.6 pct. 19.6 pct.
Santa Barbara 440 20.1 pct. 30.9 pct.
San Luis Obispo 393 12.9 pct. 28.6 pct.
Monterey 391 14.9 pct. 21.8 pct.
Coast Total 1,522 16.0 pct. 24.8 pct.
