SoCal home sales hit 12-year low
Tuesday, May 15th, 2007By Annette Haddad
Times Staff Writer
10:27 AM PDT, May 15, 2007
Southern California home sales plunged to a 12-year low for the month of April, dragged down by a dearth of transactions at the lower end of the market even as prices held steady, data released today showed.
The median price paid last month for a house in the six-county region was $505,000, the same as the month before and a 6.1% increase from a year ago, La Jolla-based research firm DataQuick Information Systems reported. It was the greatest rate of year-over-year appreciation since June, when the median rose 7.7%. The median price is the point at which half of all homes sold for more, half for less.
Yet nearly a third fewer homes in Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura counties closed escrow last month compared to a year earlier for the worst April showing since 1995, DataQuick found.
Among new and existing homes, 19,269 escrows closed in April , a 28.9% drop from April 2006 and a 12% decline from March. That’s the fewest number of homes sold in the month of April since 1995, when 15,303 homes sold.
Most of the erosion in sales appeared in the lower-priced markets of the Inland Empire that only a year ago still seemed to be soaring. In Riverside County, sales dropped 45.1% to 2,987 year over year, while in neighboring San Bernardino County, sales plunged 46.7% to 2,049, according to DataQuick, which compiles its statistics from a review of all closed residential transactions each month.
These are areas where the typical home is valued at about $400,000, making them more attractive to investors and to first-time home buyers. But with tighter lending standards now preventing many entry-level borrowers from qualifying for mortgages, and with fewer investors speculating on Southern California real estate, sales in the Inland Empire have plunged.
“The falloff in starter home sales has the effect of pushing median prices up a bit, although it’s still somewhat surprising prices haven’t declined more,” said DataQuick president Marshall Prentice.
Indeed, home price growth in the Inland Empire is waning but not collapsing. In April, the median in Riverside County fell 1% to 409,000, while San Bernardino’s median edged up 2.8%. One year earlier, in April 2006, the median rose 9.4% and 18.4%, respectively.
Elsewhere in Southern California, Los Angeles was the only other county aside from San Bernardino to see a rise in its April median price compared to a year earlier. In L.A. County, the median home price gained 5.9% to $540,000 and was identical to March’s median price. Meanwhile, sales fell 22.2% from a year ago, DataQuick said.
Orange County’s median was virtually flat at $629,000, which was a 0.2% dip from April 2006 and unchanged from the month before. Sales in Orange County declined 24.7%. Meanwhile, the median in Ventura County fell 2.4% to $572,000 as sales dropped 11.7% compared to a year earlier.
In San Diego County, where the region’s housing boom started seven years ago and where many prognosticators anticipated the first signs of a housing crash, the median price dipped 3% to $490,000 for the slowest year-over-year rate of decline since August. Sales fell 13.5%.
Southern California’s housing trends mirror what’s happening throughout the U.S. housing market. Today, the National Assn. of Realtors group reported that existing home sales nationwide fell 6.6% in the first quarter, while the national median price dipped 1.8% to $212,300.
But some analyst see a bottom to the nation’s housing market correction coming as soon as the end of the current quarter.
The pace of the decline in sales has slowed significantly since mid-2006, Ben Garber, an economist for Moody’s Investors Service said in a report Tuesday. That phenomenon, coupled with persistently low interest rates and small gains in income growth, have helped to “ameliorate the extent of the housing bust and set the stage for its recovery,” he said.