Median Home Prices Suffer Due to REO Properties for Sale
June 15th, 2009 by 
Joseph Smith
Several areas in Southern California continue to experience the devastation brought about the ever-growing number of REO properties for sale. Median home prices have dropped below their 1989 levels.
According to industry experts, areas that are selling houses less than their prices 20 years ago include San Bernardino and Riverside counties. Data showed that these areas reported more mortgage defaults and REO properties for sale per capita than any other counties in Southern California.
The drastic decline in median home prices is encouraging first-time homebuyers who are purchasing properties for less than the amount their parents paid 20 years ago.
Experts said that the housing market crisis has destroyed one doctrine; that real estate properties are good investments because their values always rise over the long term. In Lancaster, a home that was priced $130,000 in 1992 was sold for $330,000 in 2005. Now, any buyer could have it for $66,500.
Meanwhile, prices of properties across Southern California have not dropped drastically, with April median price pegged at $247,000, similar to that in 2002. However, in some areas, including Inland Empire and Antelope Valley, median prices dropped precipitously that thousands of properties have lost all their appreciation values.
In San Bernardino, which recorded a high rate of REO properties for sale, the April median price of $61,000 represented an almost 84 percent decline from its 2007 peak of $370,000.
Some neighborhoods that saw an unprecedented decline in median prices are Barstow, Palmdale, Oxnard, Hemet, Victorville, Desert Hot Springs, Santa Ana and Highland. Additionally, inland communities that saw median prices slightly higher than 1989 levels and lower than that in April 1990 were Banning, Moreno Valley and Rialto.
Industry experts agree that home prices will not improve if the still growing foreclosure problem will not be contained. Statewide, California registered 92,249 foreclosure filings last month, representing a 23 percent increase from the year-ago month.
The number of bank owned properties in the state inched down by 1 percent compared with the April data and defaults also slide down by 18 percent. However, foreclosed properties scheduled for auctions inched up by 18 percent.
Six California cities occupied the top spots in the nationwide number of REO properties for sale. These are Riverside-San Bernardino, Modesto, Merced, Bakersfield and Vallejo-Fairfield.
