The Housing Chronicles Blog: SoCal home sales rise as median prices back to 2002 levels

Thursday, February 19, 2009

SoCal home sales rise as median prices back to 2002 levels

Dataquick is reporting that sales of existing homes throughout Southern California rose by nearly 53% between January of 2008 and 2009 as prices declined to a median of $250,000 -- down by over 50% from the peak reached in 2007 and close to the median price of $242,000 last noted in February of 2002. Still, 60% of these sales were for foreclosed homes in areas (generally inland) in which bargain hunters abound. From the press release:

Southern California home sales climbed above year-ago levels for the seventh consecutive month in January as bargain-hungry buyers flocked to inland areas pounded by foreclosures and deep discounts. Increased affordability in some of those neighborhoods spurred record or near-record resale activity, while many pricier coastal towns again posted some of their slowest sales in two decades.

Foreclosures continued to play a leading role in the market, accounting for nearly 60 percent of all homes that resold, according to San Diego-based MDA DataQuick, a real estate information service. Sales of newly built homes were the lowest for a January in at least 21 years - partially a reflection of how difficult it is for builders to compete with discounted foreclosures in the inland growth areas.

A total of 15,227 new and resale houses and condos closed escrow in the six-county Southland last month. That was down 23.6 percent from 19,926 in December but up 52.5 percent from 9,983 in January 2008. A decline of 20 to 30 percent between December and January is normal...

The median price paid for all homes combined last month was $250,000, down 10.1 percent from $278,000 in December and down a record 39.8 percent from $415,000 in January 2008. Last month's median was the lowest since it was $242,000 in February 2002. January's median was 50.5 percent below the peak $505,000 median reached in spring and summer of 2007.

The median sale price - the point where half of the homes sold for more and half for less - has eroded consistently for 19 months. Its steep decline stems not only from falling home values but from changes in the types of homes selling. Increasingly, sales over the past year have involved foreclosure properties, and a growing share has been in the lower-cost inland areas. At the same time, sales in pricier coastal towns have remained sluggish, in part because of problems associated with the cost and availability of financing for high-end real estate.

So-called jumbo financing, formerly defined as mortgages over $417,000, represented about 40 percent of all purchase loans before the August 2007 credit crunch. Last month just 9.2 percent of Southland purchase loans were for more than $417,000. Conversely, a popular form of financing for first-time buyers, government-insured FHA mortgages, rose to a record 40.4 percent of January home purchase loans.

Last month's foreclosure resales - homes resold in January that had been had been foreclosed on in the prior 12 months - represented 58.3 percent of all resales, up from 56.2 percent in December and 28.6 percent a year ago. At the county level, foreclosure resales ranged from 46.0 percent of January resales in Orange County to 71.2 percent in Riverside County. In Los Angeles foreclosure resales were 51.9 percent of resales; in San Diego 55 percent; San Bernardino 67.3 percent and in Ventura County 49.1 percent...

Sales Volume Median Price
All homes Jan-08 Jan-09 %Chng Jan-08 Jan-09 %Chng
Los Angeles 3,398 4,532 33.4% $458,000 $300,000 -34.50%
Orange 1,286 1,806 40.4% $520,000 $370,000 -28.80%
Riverside 1,939 3,320 71.2% $331,500 $195,000 -41.20%
San Bernardino 1,111 2,532 127.9% $298,500 $162,000 -45.70%
San Diego 1,826 2,459 34.7% $429,000 $280,000 -34.70%
Ventura 423 578 36.6% $477,750 $335,000 -29.90%
SoCal 9,983 15,227 52.5% $415,000 $250,000 -39.80%

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