Southland home sales drag along bottom
July 16, 2008
La Jolla, CA---Home sales in Southern California continued at their
slowest pace in more than two decades last month as many potential buyers and
sellers held off if they could, or struggled with mortgage financing if they
couldn't, a real estate information service reported.
A total of 17,424 new and resale houses and condos sold in Los Angeles,
Riverside, San Diego, Ventura, San Bernardino and Orange counties last month.
That was up 3.0 percent from 16,917 the previous month and down 13.6 percent
from 20,166 for June a year ago, according to DataQuick Information Systems.
While last month's sales were the highest in ten months, it was still
the slowest June in DataQuick's statistics, which go back to 1988. The June
average is 28,488 sales, the peak was reached in 2005 when 40,156 homes sold.
"The mortgage market turbulence is putting quite a bit of activity on
hold. Policy decisions about underwriting don't really mean much if there's
little or no money to lend. Even some very well-qualified households aren't
getting mortgages these days, although this could all change fast if
liquidity comes back," said John Walsh, DataQuick president.
The median price paid for a Southland home was $355,000 last month, down
4.1 percent from $370,000 in May and down 29.3 percent from $502,000 for June
2007. The peak of $505,000 was reached in March, April, May and July of last
The median has fallen because of depreciation, especially in inland
markets, and because of the steep dropoff in home financing in the so-called
jumbo category, which until recently was 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. Jumbos last month accounted
for 16.3 percent of Southland sales â€“ up from 15.7 percent in May.
Foreclosure resales continue to be a dominant factor in today's Southern
California market accounting for 41.1 percent of all resales. That was up
from 39.2 percent in May, and up from 7.3 percent in June a year ago.
Foreclosure resales ranged from 18.9 percent in Orange County last month to
62.3 percent in Riverside County.
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 $1,671 last month, down from a $1,713 the previous
month, and down from $2,430 a year ago. Adjusted for inflation, the current
payment is at its lowest level five years. It's 34.6 percent below its year-
ago level and 22 percent lower than the spring of 1989, the peak of the prior
real estate cycle.
Indicators of market distress continue to move in different directions.
Foreclosure activity is at record levels, financing with adjustable-rate
mortgages is still at a six-year low. Down payment sizes and flipping rates
are stable, non-owner occupied buying activity is low, DataQuick reported.
Source: DQNews.com Media calls: Andrew LePage (916) 456-7157 or John Karevoll
Copyright 2007 DataQuick Information Systems. All rights reserved.