Southland home sales post annual gain -- prices drop again
August 18, 2008
La Jolla, CA---The number of Southern California homes sold last month
edged up to its highest level in more than a year as bargain hunters swept up
foreclosure properties in affordable neighborhoods, a real estate information
A total of 20,329 new and resale houses and condos sold in Los Angeles,
Riverside, San Diego, Ventura, San Bernardino and Orange counties last month.
That was up 16.7 percent from 17,424 the previous month and up 13.8 percent
from 17,867 for July a year ago, according to San Diego-based MDA DataQuick.
Last month's sales count was the highest since 21,856 homes were sold in
March 2007, though it still fell 23 percent short of the average July sales
total since 1988, when MDA DataQuick's statistics begin. From last September
through June, sales for each month were at an all-time low for that
particular calendar month, with the exception of April which was the next
lowest. Last month's sales total was the first since September 2005 to rise
above the year-ago level.
"What we're looking at is a fire sale of properties in newer affordable
neighborhoods that were bought or refinanced near the price peak with lousy
mortgages. What we're still not seeing is this level of distress spreading to
more expensive or established neighborhoods," said John Walsh, MDA DataQuick
The median price paid for a Southland home was $348,000 last month, down
2.0 percent from $355,000 in June and down 31.1 percent from $505,000 for
July 2007. That peak of $505,000 was reached in March, April, May and July of
The median has fallen because of depreciation, especially in inland
markets, and because of the steep drop off 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 15.8 percent of Southland sales.
Foreclosure resales continue to be a dominant factor in today's Southern
California market, accounting for 43.6 percent of all resales. That was up
from a revised 41.8 percent in June, and up from 7.9 percent in July 2007.
Foreclosure resales -- where a foreclosure had occurred at some point in the
prior 12 months -- ranged from 22.2 percent of all resales in Orange County
last month to 64.4 percent in Riverside County.
MDA 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 $1,632 last month, down from a $1,671 the previous
month, and down from $2,447 a year ago. Adjusted for inflation, the current
payment is at its lowest level five years. It's 36.9 percent below its year-
ago level and 24.2 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 near the all-time low as is financing with multiple mortgages.
Down payment sizes and flipping rates are stable, non-owner occupied buying
activity appears flat but may be emerging, MDA DataQuick reported.
Source: DQNews.com Media calls: Andrew LePage (916) 456-7157 or John Karevoll
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