Focus On Newer Construction

This week we're taking a fresh look at what's happening with newer construction homes in the Lompoc Valley. As a refresher - what I mean by "newer construction" is resale homes (not sold by the builder) built since 2004.

As I've said a few times here, this is a segment that has been hammered hard with distressed properties. When you think about it, you'll understand why - the big bulk of these are homes that sold at or near the peak of our market, and a lot of them were sold with some pretty risky financing. That's a perfect recipe for distressed properties.

We have a moderate inventory of these homes on the market this morning, with 15 active listings. No surprise, distressed sales dominate these with 4 REO's, 10 short sales, and only 1 non-distressed listing currently on the market.

Sales activity has increased a little bit since I last reported on this segment back in July. We currently have 3 contingent sales (2 REO/1 SS) and 3 pending sales (0 REO/1 SS/2 trad). We've had 8 sold units over the past 3 months (2 REO/5 SS/1 trad). I've been expecting to see the mix of REO's and short sales shift to more short sales. This is probably the hardest hit segment in our market, so it's possible that this is a bellwether of things to come. Or it could just be a fluke of a small data set.

The signals are mixed on what we're seeing as far as a price trend on these. It appears from what I've been seeing that this has been the softest segment price-wise in our market. The median sale price on these units has dropped significantly in recent months, but the average price per square foot has been pretty stable. A combination of these being heavy in distressed sales and at a price point that isn't in our "sweet spot" seems to be a drag on values right now for these units.

Hope you all have a very Merry Christmas! See you back here next week. I'm sure I'll come up with something to share with you by then.