Southland home sales: New price peak, slowest December in ten years
January 16, 2007
La Jolla,CA----Southern California's housing market continued to send mixed signals last month as prices reached a new peak while sales volume remained at a ten-year low, a real estate information service reported.
The median price paid for a home in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties was $495,000 last month, a new record. That was up 1.6 percent from $487,000 for the month before, and up 3.3 percent from $479,000 for December a year ago, according to DataQuick Information Systems.
The previous peak was $493,000 last June. Year-over-year price increases have been in the single digits for nine months. Last month's record median was in large part due to strong sales of new homes, which is normal for December.
"The market is still readjusting after the frenzy in 2004 and 2005. Market indicators tend to point in different directions during a turn. We are watching the San Diego market carefully, sales and price trends there have tended to lead the region," said Marshall Prentice, DataQuick president.
A total of 22,485 new and resale homes were sold regionwide last month. That was up 10.3 percent from 20,388 in November, and down 22.3 percent from 28,952 in December a year ago. Last month was the slowest December since 1995 when 19,202 homes were sold. DataQuick's statistics go back to 1988, the December average is 23,699 sales.
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.
While year-over-year sales in the region have declined for the last 13 months, San Diego County's sales started to decline 30 months ago. San Diego County's median peaked in November 2005 at $518,000 and was $483,000 last month, a 6.8 percent decline. When seasonality and shifts in market mix are factored in, San Diego County's drop from its peak is just over four percent. Indications are that San Diego prices will stay where they are, at least for the short term.
"In any real estate cycle, when prices peak, they don't level off at that peak, they come down some. The question is, how much? We need to remember that prices have gone up 100 percent in Southern California the last four years. Most of that increase is here to stay," said Prentice.
The typical monthly mortgage payment that Southland buyers committed themselves to paying was $2,265 last month, the same as the previous month and up from $2,255 a year ago. Adjusted for inflation, current payments are 1.5 percent above typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 6.6 percent below the current cycle's June peak.
Indicators of market distress are still at a moderate level. Financing with adjustable-rate mortgages is flat. Foreclosure activity is rising but is still in the normal range. Down payment sizes are stable and flipping rates and non-owner occupied buying activity is down, DataQuick reported.
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