Southern California Profit Report Summary

The attached spreadsheet includes a report of median profits yielded from recent resales of existing single-family homes (SFRs) and condominiums/townhouses in Los Angeles, Orange, Riverside, San Bernardino and San Diego Counties from October 27 through November 22, 2006. The data set included only properties for which both the current and the prior sales were arm’s length, market-value
sales. The table also provides a distinction between the resale performances of single family residences (houses) and condominiums/townhouses.

Key findings of the data set include:

1. Properties resold more quickly in the Inland Empire than in the coastal counties. The median time between sales ranged from 42 months (three years, six months) in Riverside County and 46 months in San Bernardino County to 63 months (five years, three months) in San Diego County. Condominiums and townhouses were resold more quickly than houses (SFRs) in all counties except Riverside County.
2. Homeowners who resold their residences almost always made a great deal of money, with implied dollar gains from $172,000 in Riverside County to $315,500 in Orange County.
3. Homeowners who resold their residences almost always realized high profit rates, with implied gains ranging from 74 percent in Riverside County to 116 percent in San Bernardino County. Implied profit rates were higher for SFRs than condos, because they had usually been held for longer times before being resold.
4. The implied annualized profit rates, computed from the implied profit percentages and the median time between sales, ranged from 11.7 percent per year in San Diego County to 22.2 percent per year in San Bernardino County.
5. Very few homeowners lost money upon resale - from 2.0 percent in San Bernardino County to 7.6 percent in San Diego County.
6. In all five counties, more than sixty percent of resales were done with 50 percent or more profit over the previous sale. In two of the five counties, more than half of the resales were done with more than 100 percent profit over the previous sale.

For further information or to schedule an interview with Dr. Christopher Cagan, director of research and analytics, please contact Carrie Gaska at (714)250-6759 or by email at cgaska@firstam.com.

First American Real Estate Solutions is a member of The First American Family of Companies and America’s largest provider of advanced property and ownership information, analytics and services. First American RES’ database covers more than 2,900 counties representing 99 percent of the United States population. With more than 600,000 users nationwide, First American RES products are used by companies to improve customer acquisition and retention, detect and prevent fraud, improve mortgage transaction cycle time and cost efficiency, measure the value of residential and commercial properties, identify real estate trends and neighborhood characteristics, track market performance and increase market share. First American RES is a joint-venture company 80-percent-owned by The First American Corporation and 20-percent-owned by Experian. More information about First American RES can be found on the Internet at www.firstamres.com.