Rewind: SoCal home prices down 34%, back to '03 levels

Breaking: Median Southern California home prices continued their free fall in August, falling another $18,000, to $330,000 -- a 34% decline from year-ago levels. The median price of homes sold in the region has now rolled back to November 2003 levels, wiping out much of the gains achieved in the historic housing bubble.

The monthly price decline from July to August was even steeper in Los Angeles County, where prices fell $20,000 in a month -- almost $1,000 every weekday -- to $380,000, a 31% decline from year-ago levels.

The level of home sales across the region was generally higher than year-ago readings, as foreclosed houses at fire sale prices lured buyers into the market, DataQuick reported. Across the region, sales rose 9% from year-ago levels, including a 44% surge in Riverside County, the region's foreclosure capital. Sales in Los Angeles County, however, continued to lag, running 7.7% below last year's depressed levels.

More coming on this post. Read the entire MDA DataQuick press release by clicking below.

-- Peter Viles

La Jolla, CA--- Southern California home sales downshifted slightly in
August from July, but were higher than a year ago for the second consecutive
month. The median sales price continued to tumble, declining the most where
buyers were the most active, a real estate information service reported.
     The median price paid for all new and resale houses and condos sold in
Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange
counties was $330,000 last month, down 5.2 percent from $348,000 in July and
down a record 34 percent from $500,000 in August 2007, according to San
Diego-based MDA DataQuick.
     Last month's median stood at the lowest point since November 2003 when
it was also $330,000. The median peaked at $505,000 in the spring and summer
of last year.
 "It's the most common and pressing question we hear from Wall Street and
Main Street: When will the housing market hit bottom? We see tentative signs
that sales – not prices – have hit bottom in some inland markets. That's
where home values have fallen the most, stoking a lot more demand," said John
Walsh, MDA DataQuick president.
     "Some expect prices to bottom out soon, too," he continued. "That may
happen, but history suggests that few of us will time the bottom precisely.
Foreclosure activity remains high, credit is still tight, affordability
remains strained on the coast and the job market is soft. Our take remains
that a lot of buyers and sellers who don't have to act now are just sitting
tight, holding out for a better time to make their move."
     The yearlong plunge in the Southland median sales price reflects three
things: Depreciation, a high concentration of sales made after or under the
threat of foreclosure (mainly in inland markets), and a dramatic decline in
homes financed with larger, so-called jumbo mortgages. Until recently such
mortgages were defined as over $417,000 and were common in pricier coastal
markets.
     Before the credit crunch hit just over a year ago, nearly 40 percent of
Southland sales were financed with loans over $417,000, compared with 15.6
percent of sales last month.
     A total of 19,366 new and resale houses and condos closed escrow in
Southern California last month. That was down 4.7 percent from 20,329 in July
but up 9.1 percent from 17,755 in August 2007.
    August's sales total was 30 percent lower than the average for that month
and marked the third-lowest for any August since 1988, when MDA DataQuick's
statistics begin. August sales peaked in 2003 at 39,562.
     Sales have picked up most – sometimes at double or more last year's pace
– in inland communities where home values have plummeted and foreclosures
have soared. Foreclosure resales made up 45.5 percent of all Southland
resales last month, up from 43.7 in July and 10 percent a year ago. The
figure represents the percentage of homes resold in August that had been
foreclosed on at some point in the prior 12 months.
     Foreclosure resales were highest in Riverside County, at 65.2 percent of
resales, and lowest in Orange County, at 33.4 percent.
     MDA DataQuick is a division of MDA Lending Solutions, a subsidiary of
Vancouver-based MacDonald Dettwiler and Associates. MDA DataQuick 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 $1,566 last month, down from a $1,642 the previous
month, and down from $2,421 a year ago. Adjusted for inflation, the current
payment is at its lowest level in more than five years. It is 38.6 percent
below its year-ago level and 26.9 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 might be emerging, MDA DataQuick reported.

(chart)

All homes        Aug-07   Aug-08    %Chng     Aug-07     Aug-08    %Chng
      
Los Angeles       6,647    6,138    -7.7%   $550,000   $380,000   -30.9%
Orange            2,285    2,713    18.7%   $642,250   $440,000   -31.5%
Riverside         2,834    4,078    43.9%   $394,523   $247,450   -37.3%
San Bernardino    2,096    2,439    16.4%   $360,000   $215,000   -40.3%
San Diego         3,104    3,148     1.4%   $475,000   $350,000   -26.3%
Ventura             789      850     7.7%   $575,000   $400,000   -30.4%
SoCal            17,755   19,366     9.1%   $500,000   $330,000   -34.0% 

 

Source: MDA DataQuick, DQNews.com

Comments

[Arti]

These median numbers are irrelevant. They're skewed by the hundreds of thousands of homes sitting in the desert where the homebuilders built cities no one wants to live in. In the nice areas, the damage has been minimal, and in places like Santa Monica, even the biggest financial collapse in 80 years hasn't put a dent in the sky-high prices. If the Big One hits and the entire city of SM gets swallowed up by the ocean, it will still be $1.5 million for a teardown north of Wilshire.

[David in Los Angeles]

really feel sorry for anyone who bought in the past 2-3 years and tried to play by the rules ...

[mike]

i am still speculating in real estate flips and i am doing great financially!!!!!!!!!!!!!!!!!!!!

[TheTruthHurts]

These median numbers are irrelevant.

Posted by: Arti | September 17, 2008 at 10:36 AM

No Arti, you're irrelevant! Your comments on this blog are always suspect.

TheTruthHurts

[Anonymous]

I wouldn't be so sure about the high end. It seems that the stock markets have only just begun capitulation. The drop has been mild by bear market standards so far. And for a recession, job losses have really been mild so far as well. Very few really expected Lehman to BK, but it did. To go back a bit, no one expect the law firm Brobeck to implode, but it did. I wouldn't be surprised to see a few big law firm implosions in the next 12 months, as well as some other businesses vanishing. At the very least, year-end bonuses this year will be substantially down. Taken together with the sharp job losses in the high-paying local real estate and mortgage industry and the lack of any move-up buyers, I think the supply of buyers who can afford a house of $1.5M and up is dwindling and will dwindle further. The pain of the last few years was felt mostly by the middle and lower classes. It appears the pain this year is probably going to be felt mostly by the rich (it is the rich, after all, who hold most of the financial assets that are currently imploding). The median numbers might already be telling us this story. One reason for the drop in the median is low quantity of sales of mid- to high-end homes.

[victor]

please report all facts! Most homes currently on the market in the San Gabriel Valley are Bank owned homes. "the bottom of the barrel" Those home's are being sold in Five days and in many areas creeping up by about 3 to 5 percent. About 70% of the market is using Fha as their source for Loan's which is NOT fico score driven. It is very easy to qualify for FHA, this is the true reality. All that is needed is a min of 580 fico score a decent debit to income ratio, 3% down (3.5 starting October) and prove you can afford the home with current pay check stubs, and last two years w2's its that simple.

[Lou]

HA HA HA HA HA HA HA! Where are all the "real estate always goes up people now"

And to always point out that high end areas prices are high is an idiotic argument. Most people couldn't afford those areas anyway. And plus I know a rich guy in Brentwood on Tigertail Rd who bought his house for $4,000,000 during the bubble. Now he can only get $3.000.000. Most people can't afford a $3,000,000 house anyway but to him it's a $1,000,000 loss. To say those areas an unaffected is idiotic. Rich people feel some pinch too just not as drastic as the rest of us.

[El Guapo]

Alt-A resets will do for the Westside what Subprime did for the IE. To see denial in the face of historic economic indicators pointing downward still amazes me. I mean, at some point, you have to let it go.

[anonymous]

I still think the bottom is next summer. In 2003 the economy was stronger and credit wasn't in trouble. Not to mention the major jumbo ARM reset due this spring.

[Yearning For Home]

Ever since the downturn, DataQuick has always concluded each and every one of its press releases with exactly the same phrase: "Indicators of market distress continue to move in different directions," which I presume to mean that there are one or more indications of a healthy housing market. Through what many consider to be the worst housing crisis since the Great Depression, how can this be? Heaven help us if "indicators of market distress" start all moving in a negative direction!

[Pasadena'ed]

These median numbers are irrelevant.

Posted by: Arti | September 17, 2008 at 10:36 AM

LOL. Right, because the median is only relevant when it's artificially high. Reality has just barely begun to bite. Get ready for the chewing.

[ckomel]

Mike,

Your post has no informative content nor does it give us some opinion based on some sort of data or analysis. And, my grandpa left me 5 houses and I'm doing great financially, who cares!
What trends do you see in the flipping business? How long does it take your flips to sell compared to two, three years ago? Which quantile of the market does your experience depend on? Below 300K, below 600K, above 3M ? How did your flip rates change? And give us some change we can believe in ;o) Everything is the same won't do. Cause that wouldn't be credible.

[mike]

i'm making money on homes in the inland empire. i am buying cheap and selling high. it's capatilism at it's best. if you have cash right now you can buy cheap and sell high in a very short period of time.

[Joe]

I am sick and tired of people mentioning the bottom, the bottom of this market won't occur until these properties are affordable once more. We might be at the bottom in the Inland Empire, but the Westside is just getting started. The high end areas are always the last to correct themselves, once we see the resets of the alt a's/arm adjustables things will really get going. Peter please try and find us some information, that doesn't have retards talking about a bottom in a bubble market that still has plenty of air to release. We won't see a bottom at least until 2011, thats what the people in the futures market are betting and they're betting with real money. Not taking stupid uneducated guesses.

[jbunniii]

We'll probably bottom out at around 1997-1998 levels and stay there for several years before rising again. That will be the right time to buy. I'm guessing the sweet spot will be around 2012-2014.

[CompaJD]

Music to my ears. Aaaaaaahhhhh.

[keith]

Mike's just a troll, trying to get a rise out of people. The Intardnet was made for him.

[Rational Renter]

Everybody please listen. The fact that all sales are weighted in the low-end IS relevant, as all the Pollyannas would have you believe. But the problem for them is, that fact actually proves all of us "doom and gloomers" right. The ONLY things that can sell right now are the insanely cheap bank-owned homes. That's because those are the only properties approaching affordability. Higher priced listings cannot sell b/c there isn't enough cash out there to buy them. That's going to change, either.

[smrr]

arti's not a housing bull. his point is he's frustrated he hasn't seen the west side recognize it's worth half what it was yesterday. at least from what i remember of his posts he's not a bubble or a crash denier. just someone who wants the west side to fess up and say uncle.

[dclogang]

Medium sales price in SFV will go BELOW

$200,000

at or near the bottom (if there IS a bottom)

Maybe to $175,000.

Yes! Yes! Yes! Yes! Yes! yipppeee!

[MyLessThanPrimeBeef]

So, let me get this straght.

If you live north of Wilshire, the Great Depression is when you aren't invited to a party at the Playboy Mansion.

Let me get another thing straight.

By joining a particular political party, you can somehow, magically and mysteriously, transform yourself from being a sinner to a saint, since every member of your new party is and has always been a saint and every member of the other party is and always been Satan?

[They Live]

House prices need to be at 1999 levels (halfway there). We should start over, before we entered the Satanic millineum where clandestine subterranean lab facilties took over everyone's lives with subliminal microwave weapons capable of secretly invading, controlling and manipulating and subsequently indoctrinating and conditioning to add to their legions. Outrageous home prices and the bubble/bust matrix is merely one of their many tactics to keep the uninitiated in want. The indoctrinated getting free money is the key.

"All the merry little elves can go hang themselves
I'm stacked high to the roof and I aint without proof
If you don't believe me, come see"

"Huck's Tune"- Bob Dylan

[martscan]

Arcadia, zip 91007, July 2007 to July 2008, the median house price is $930,000, +4%.

[Marlena Christian]

Too many areas were artifically inflated with this "so called" housing boom - I have friends in La Puente, CA who actually bought a 1950's cracker box with little to no improvements for over $450,000 but it's real value was under $200,000 and that's where it's headed.

Fools are what drove up husing prices not real value.

[Just Call Me Maria]

If you live North of Wilshire, the Playboy mansion is for THOSE KIND of people, not our kind. *snerk*

I don't need to see great drop off a cliff, but a nice loud hiss of deflation would be nice.