In 2007, Realtor John DiMassa dealt exclusively with traditional home sales. Today, all his listings are bank-owned properties that homeowners lost to foreclosure.
And the type of buyers his listings attract are nearly all first-time homebuyers.
“Every transaction I’ve done this year, with the exception of one I just closed, is a first-time buyer,” said DiMassa, who works out of Century 21 Amber Realty in Torrance.
Increasing housing affordability, especially in areas that have been hit hard by foreclosures, has resulted in a rush of first-time buyers entering the market.
Statewide, the share of first-time buyers rose to 38 percent in 2009, compared with 19 percent last year – a doubling of the share – according to a survey released Tuesday by the Los Angeles-based California Association of Realtors.
“Housing affordability has improved dramatically in response to the decline in home prices along with historically low mortgage rates, creating a tremendous opportunity for homebuyers in California,” CAR President James Liptak said in a press release.
Fifty-one percent of all California sales this year have involved bank-owned properties (38 percent) or short-sales (13 percent), where the property sells for less than the loan amount, the CAR survey found.
The remaining 49 percent of sales involved a traditional transaction, CAR said.
The CAR survey also found that those who purchased a bank-
owned home found the experience of obtaining a loan more difficult than buyers involved in a traditional transaction.
One reason for that difference is that bank-owned properties tend to be in areas that have experienced “significant price declines,” CAR chief economist Leslie Appleton-Young said in an interview.
“Appraisals can be an issue in a market where you’ve seen a lot of price movement in either direction, down or up,” Appleton-Young said. “So you have lenders who are very interested in making sure the buyer is qualified.”
Another reason is that lenders now require more proof of income and other documentation, compared with the far more laissez faire approach of just a few years ago, Appleton-Young said.
DiMassa handles properties usually under $400,000, and mostly in the South Bay’s inland areas such as Gardena and Carson, as well as South Gate and Norwalk.
This market is so active that “it’s not uncommon for me to get 20 offers on a property, and it drives the price up,” DiMassa said. “They’re all first-time homebuyers.”
By contrast, many homeowners who would like to “move up” to a more expensive residence are hampered by the lack of equity in their property due to the decline in prices, DiMassa said.
