Southland home sales slowest since 1995
August 14, 2007
La Jolla,CA----Southern California home sales remained at their lowest level since the mid 1990s last month as potential buyers continued to hold out for lower prices. The median price paid for a home inched back up to a peak first reached in March, tugged up by sales in high-end markets, a real estate information service reported.
A total of 17,867 new and resale homes sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was down 11.4 percent from 20,166 for the previous month, and down 27.4 percent from 24,614 for July last year, according to DataQuick Information Systems.
Last month's sales were the slowest for any July since 1995, when 16,225 homes sold, the lowest for any July in DataQuick's statistics, which go back to 1988. The strongest July was in 2003, when 38,996 homes sold. The July sales average is 26,829.
"These are interesting times because the slowdown in home sales isn't part of a broader economic slowdown, it's a post-frenzy re-balancing act. The last time we had sales this slow, Southern California had been in recession for a few years. Jobs were being lost in droves, people were leaving the area and home prices fell significantly. This time around we haven't seen that, sellers are holding out and we can only assume demand is building up," said Marshall Prentice, DataQuick president.
The median price paid for a Southland home was $505,000 last month, the same as the record high recorded in March, April and May. It was up 0.6 percent from $502,000 for June, and up 3.7 percent from $487,000 for July last year.
When adjusted for shifts in market mix (i.e. fewer lower-cost homes selling now), year-over-year price changes went negative in January and are now roughly three percent below year-ago levels. The declines are in the lower half of the market, while prices are flat or even increasing in the upper half of the market.
DataQuick, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates, monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.
The typical monthly mortgage payment that Southland buyers committed themselves to paying was $2,447 last month, up from $2,430 the previous month, and up from $2,413 a year ago. Adjusted for inflation, current payments are 11.4 percent above typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 1.4 percent below the current cycle's peak one year ago.
Foreclosure resales accounted for 8.3 percent of July's sales activity, up from 7.7 percent in June, and up from 2.0 percent in July of last year. Foreclosure resales do not yet have a marketwide effect on prices, although pockets of foreclosure discounts appear to be emerging in some local Inland Empire and High Desert markets.
Other indicators of market distress continue to move in different directions. Financing with adjustable-rate mortgages and multiple mortgages has declined significantly. Down payment sizes are stable, flipping rates and non-owner occupied buying activity is flat, DataQuick reported.
All Homes No Sold
Jul-06 No Sold
Jul-07 Pct.
Chg Median
Jul-06 Median
Jul-07 Pct.
Chg Los Angeles 8,844 6,809 -23.0% $520,000 $547,500 5.3% Orange 2,982 2,391 -19.8% $640,000 $640,000 0.0% Riverside 4,763 2,769 -41.9% $415,000 $399,000 -3.9% San Bernardino 3,500 2,008 -42.6% $366,500 $355,000 -3.1% San Diego 3,584 3,106 -13.3% $500,000 $489,000 -2.2% Ventura 941 784 -16.7% $614,000 $582,500 -5.1% SoCal 24,614 17,867 -27.4% $487,000 $505,000 3.7%
Source: DQNews.com
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