"Fire sale" boosts SoCal home sales; Prices down 31% from '07

Breaking: A "fire sale" of cheaper houses boosted home sales in most of Southern California in July, as median sales prices continued to tumble, falling 31% from year-ago levels across the region, MDA DataQuick reported Monday morning. Resales of foreclosed houses made up 43.6% of the region's housing market in July, as cheaper houses financed by "lousy mortgages" during the housing bubble continued to dominate sales.

"We're looking at a fire sale of properties in newer affordable neighborhoods that were bought or refinanced near the price peak with lousy mortgages," said John Walsh, president of MDA Dataquick. "What we're still not seeing is this level of distress spreading to more expensive or established neighborhoods."

Annette Haddad's coverage at LATimes.com points out that median sales prices for the SoCal region -- now at $348,000 -- have rolled back to February 2004 levels.

Price declines were most severe in the foreclosure-battered Inland Empire, were median sales prices fell 35% from year-ago levels. In San Bernardino County, the median sales price now stands at $230,000. In Los Angeles County, median prices fell to $400,000 -- down from $415,000 in June, and down 26.9% from year-ago levels of $547,500.

Overall, though, the level of home sales across Southern California in July rose 13.8% from July 2007 levels, DataQuick reported. Only Los Angeles County, where home sales dipped 3.2% from '07 levels, reported a year-over-year decline in sales.  The sales increase was sharpest in Riverside County, where sales increased 48.6% from year-ago levels; but 64.4% of those sales were "foreclosure re-sales," sales of house previously foreclosed on.

Below, median sales prices, year-over-year change in prices, and trailing 12-month sales totals for Los Angeles, as reported by Dataquick.

June 04  $414,000                        32.3%                127,027
Jan. 07   $520,000                        6.0%                 108,755
Feb 07    $528,000                        8.0%                 107,966
Mar 07    $540,000                        6.0%                 105,514
Apr 07    $540,000                        6.0%                 103,450
May 07   $550,000                        7.0%                  100,160
Jun 07    $545,000                        5.0%                   96,513
Jul 07    $547,500                        5.0%                    94,478
Aug 07  $550,000                        6.0%                    90,985
Sept 07 $525,000                         1.2%                    86,610
Oct 07  $500,000                         -3.8%                   82,527
Nov 07  $499,000                         -3.5%                  78,712
Dec 07 $470,000                        -10.5%                  74,663
Jan 08 $458,000                         -11.9%                 71,256
Feb 08 $460,000                       -12.9%                  68,424
Mar 08 $440,000                       -18.5%                  64,334
Apr 08  $435,000                      -19.4%                  62,125
May 08  $422,000                       -23.3%                60,144
June 08 $415,000                       -23.9%                58,242
July 08  $400,000                        -26.9%               58,025

Note: June 2004 stats are added to show peak levels of 12-month L.A. sales and y/y change in median sales prices. Source: DataQuick Information Systems.

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.

Comments

[Scott McIntosh]

Hey HP12c,

The statistics are taken directly from the MLS sales data. Ill see about maybe doing a quarter comparison for you, if you like. 1st or 2nd quarters 2007 vs 2008.

[RM]

Sheila, you make a fair point with your question. My guess is that a lot of homeowners currently in trouble would hold on to their homes if the terms were made more affordable with a lower rate and a reduction in the amount of property taxes if the values have dropped. However, I think that for the most part banks are in the business of making as much money as possible, regardless of the hardship that they may impose on people. Why else would they have come up all the teaser loans giving them the potential for huge returns? As a matter of fact, the only reason that many banks have now been willing to restructure some loans is because it was also to their advantage to do so because they realized that they would soon be overwhelmed and out of business. While it may be true that loans are held in complicated structures, it is not the only reason why they drag their feet.

[justanotherMillaStalker]

and Tim K., i paid $410K, house appraised for $440K, was listed for $450K, lot size is 5,300 feet. so if prices depreciate another 10-15%, i won't worry too much about the short-term losses, especially as i appreciate the view from my deck.

Posted by: Milla | April 01, 2008 at 02:06 PM

Oh snapz. The view is getting worse from here.