Southland home sales slowest for any month in 20 years

February 13, 2008

La Jolla,CA----Southern California home sales dipped below 10,000 transactions for the first time in more than 20 years last month as most potential buyers and sellers appear to be waiting out market turbulence, a real estate information service reported.

A total of 9,983 new and resale houses and condos were sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in January. That was down 24.6 percent from 13,240 for the previous month, and down 44.9 percent from 18,128 for January last year, according to DataQuick Information Systems.

Last month's sales total was the lowest for any month in DataQuick's statistics, which go back to 1988. Since September, sales for each calendar month were a record low for that particular month.

"We don't know how much of this downturn is driven by market fundamentals, and how much is due to turmoil in the lending industry. The market has been sending mixed signals since August, and it's virtually impossible to see trends and make predictions. Our sense is that quite a bit of activity is on hold, we just don't know how long it can be kept on hold," said Marshall Prentice, DataQuick president.

The median price paid for a Southland home was $415,000 last month, the lowest since $414,000 in January 2005. Last month's median was down 2.4 percent from December's $425,000, and 14.4 percent below $485,000 for January 2007.

Last month's median was 17.8 percent below the $505,000 peak reached last spring and summer. While the steep decline in median sales price does reflect a drop in prices, it also reflects significant shifts in the types of homes selling. Particularly noticeable is a drop-off in sales of more expensive homes financed with "jumbo" mortgages.

Since the credit crunch hit in August, these loans for over $417,000 have become more expensive and harder to obtain. Sales financed with jumbo loans represented 18.9 percent of Southland transactions last month, down from 38.2 percent a year earlier.

The median price paid for a home financed with a conforming loan was $380,000 in January, down 5.0 percent from $400,000 a year ago, and down 7.3 percent from the $410,000 peak reached in March and April of 2007.

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 $1,889 last month, down from $1,985 the previous month, and down from $2,263 a year ago. Adjusted for inflation, the current payment is 14.5 percent lower than the spring of 1989, the peak of the prior real estate cycle. It is 25.0 percent below the current cycle's peak in June 2006.

Indicators of market distress continue to move in different directions. Foreclosure activity is at record levels, financing with adjustable-rate mortgages or with multiple mortgages has dropped sharply. Down payment sizes and flipping rates are stable, non-owner occupied buying activity is flat, DataQuick reported.

All Home Sales	No Sold Jan-07	No Sold Jan-08	Percent Change	Median Jan-07	Median Jan-08	Percent Change
Los Angeles	6,805	3,398	-50.1%	$520,000	$458,000	-11.9%
Orange	2,400	1,286	-46.4%	$600,000	$520,000	-13.3%
Riverside	3,089	1,939	-37.2%	$415,000	$331,500	-20.1%
San Bernardino	2,373	1,111	-53.2%	$370,000	$298,500	-19.3%
San Diego	2,772	1,826	-34.1%	$472,000	$429,000	-9.1%
Ventura	689	423	-38.6%	$565,000	$477,750	-15.4%
SoCal	18,128	9,983	-44.9%	$485,000	$415,000	-14.4%