Southland home sales highest in eight months
May 19, 2008
La Jolla, CA--- Southern California home sales surged last month to the
highest level since August as bargain shoppers took advantage of price
slashing. Although some higher-end costal markets also posted gains, the
swell in transactions mainly reflects more sales of homes under $500,000 in
inland areas where depreciation and foreclosures have been greatest, a real
estate information service reported.
A total of 15,615 new and resale houses and condos sold in Los Angeles,
Riverside, San Diego, Ventura, San Bernardino and Orange counties in April.
That was up 21.9 percent from 12,808 the previous month but down 19 percent
from 19,269 in April last year, according to DataQuick Information Systems.
Sales from March to April have risen on average 1.2 percent since 1988,
when DataQuick's statistics begin. Although last month's sales total was the
highest for any month since August 2007, when 17,755 homes sold, it was still
the weakest April since April 1995, when 15,303 homes sold, and the second-
lowest April on record. Last month was 38 percent below the April average
of 25,311 sales.
Post-foreclosure homes continued to play a major role in the Southland
market. Of all the homes that resold in April, 37.5 percent had been
foreclosed on at some point in the prior 12 months, compared with a revised
35.8 percent in March and 4.6 percent a year ago. Across the six-county area,
"foreclosure resales" ranged from 26.9 percent of resale activity in Orange
County to 52.7 percent in Riverside County.
Last month's upswing in sales was most pronounced for homes priced
under $500,000, which accounted for two-thirds of the Southland's sales gain
over March. Riverside County, the epicenter of Southland foreclosure activity
and price declines, posted the region's only year-over-year sales increase -
that county's first in two years.
Zip codes showing relatively large annual gains in sales of existing
houses included those in San Jacinto and Lake Elsinore in Riverside County,
Victorville in San Bernardino County, Lake Forest and Anaheim in Orange
County, Lancaster in Los Angeles County and Chula Vista in San Diego County.
"Quite a few more buyers stepped off the sidelines last month to snap up
homes at substantial discounts relative to the market's short-lived peak,"
said Marshall Prentice, DataQuick president. "It's no surprise, given the
magnitude of the price declines in inland areas and the fact sales have been
so amazingly low for so long. We continue to look for evidence of a sales
bounce in the mid-priced and higher-end markets along the coast. If the
higher conforming loan limits are making a difference in those areas it's
certainly not a large one, at least not as of the end of April."
The median price paid for a Southland home was $385,000 last month,
unchanged from March but down 23.8 percent from the peak median of $505,000
in April 2007. That peak was reached several times last spring and summer.
Last month was the first in eight months that the median did not decline on a
The median has plunged for two reasons: depreciation, especially in
inland markets, and the sharp dropoff in the past eight months of home sales
financed with so-called jumbo mortgages, which until recently were defined as
loans above $417,000.
Before the credit crunch hit in August 2007, nearly 40 percent of
Southland sales were financed with jumbo loans. Last month jumbos accounted
for 15.1 percent of Southland sales - about the same as in March.
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 $1,716 last month, down from a $1,816 the previous
month, and down from $2,356 a year ago. Adjusted for inflation, the current
payment is 18.3 percent lower than the spring of 1989, the peak of the prior
real estate cycle. It is 33.1 percent below the current cycle's peak in June
Indicators of market distress continue to move in different directions.
Foreclosure activity is at record levels, financing with adjustable-rate
mortgages is at a six-year low. Down payment sizes and flipping rates are
stable, non-owner occupied buying activity is increasing, DataQuick reported.
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Source: DQNews.com Media calls: Andrew LePage (916) 456-7157 or John Karevoll
Copyright 2007 DataQuick Information Systems. All rights reserved.