Real Estate Profits Return to California
Rising home prices have hiked more California homes into positive equity and increased the percentage of home owners making a profit from home sales, according to California Association of Realtors' data.
The association reported 88.4% of home sellers left closing tables with money in their pockets in April. This is the highest percentage of money making sales on a monthly basis since 2007, CAR added.
The April percentage was slightly higher than the 87.4% of California real estate sales that made money in March and 13 points higher than April of last year, the association said. April was the tenth straight month that saw a rising percentage of home sales make money for sellers, CAR said.
The CAR figures put the most recent spotlight on a trend that has been percolating since the beginning of 2014.
An April study conducted by economists for real estate website Trulia reported seven of the 10 fastest moving real estate markets – markets where a high percentage of homes for sale find buyers within 60 days – are located in California.
The association reported a corresponding shrinking number of foreclosed property sales by financial institutions or short sales by economically distressed homeowners.
Trulia attributed the speed and rising demand in many California markets to a combination of stronger local economies that helped fuel demand, and a lack of new home construction that helped keep supply tight. For example, many of the fastest moving real estate markets have been ones where the locality has added only 10 new homes per year for every 1,000 existing homes, the organization said.