Rewind: SoCal home prices down 34%, back to '03 levels
September 17, 2008 | 10:10
am
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%
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
Martscan, it's not true that it's being driven up by baby milk formula money.
Posted by: MyLessThanPrimeBeef | September 17, 2008 at 03:21 PM
I have'nt seen things change at all in Newport Beach!
Posted by: Mr. Facts | September 17, 2008 at 03:45 PM
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.
Posted by: mike | September 17, 2008 at 12:10 PM
Sure you are, you bet
Posted by: keith | September 17, 2008 at 03:48 PM
House prices are still insanely high in the OC.
Earlier I was looking on Trulia at Irvine where condo sellers are still demanding $350+ per sqft. This is a price premium of 100% on 2000 prices which as a compounded annual increase is 9%.
Sure these properties are cheaper than they were in 06 but they weren't exactly giving them away in 2000 and +9% appreciation from then is quite frankly "barking".
Posted by: barking mad | September 17, 2008 at 03:53 PM
Mr. Facts, it's like Lehman, you have to make your move before you actually see any change.
It was very sad and I am not making light of that tragedy, but, by the time you can see the Metrolink train, it's already too late.
Posted by: MyLessThanPrimeBeef | September 17, 2008 at 03:54 PM
I'm in my early 30s and a lot of my friends who were waiting on the side lines are starting to jump in the housing market. I tell ALL of them not to buy now. I have been advising this for the last year. When I start telling them the possible financial issues and coming correction, they nod their heads and have blank stares.
A few weeks later I hear they buy a property. To them, they thought they got a good deal but all of them have had price drops in their neighborhood after their purchase. There typical response has been, "It's gone down a lot, It won't go any lower." I was too polite to say it to them but I was thinking, "You aren't the most objective person." I think the truthful response from them should have been, "I hope it does not go down a lot." UNFORTUNATELY, IT WILL AND I WARNED YOU.
Alas, I am too polite to say I told them so but now I just nod my head and have a blank stare. At least my wife believes me now after all the recent bank failures.
Posted by: WaitingInSocal | September 17, 2008 at 04:38 PM
I don't feel sorry for people who were hoping to make a quick buck on a flip or for those who lied to get a house. I just waited for the inevitable price drop to start and when I was comfortable, bought a house. Told the truth about income, paid 20% down, and got a modest 30-year loan. Yes, I was waiting to buy since 2005 but I knew buying before now would have been a mistake. There is no way the market could sustain the outrageous prices.
Posted by: Carrie | September 17, 2008 at 05:42 PM
We sold our home in Temecula in 2003. Living happily on the Oregon Coast.
Posted by: Dick Diamond | September 17, 2008 at 05:45 PM
waitinginsocal...
same position as you (30's, renter, SFV, 230k income), and I also convinced my wife's parents to get their retirement out of the stock market and into cash.
Best thing from this crash so far is now both my wife and her family no longer think I am crazy...
Sadly, I predict even worse times to come, and I really hope I am wrong. Maybe that London collider will determine the source of mass and lead to a total world paradigm shift that I can somehow take advantage of... (Either that or the black hole option).
By the way, if a black hole does suck in the solar system, I am going to be pissed off that I didn't go ahead and buy that Westside condo. Turns out Neg-AM is no problem.
Posted by: tony logan | September 17, 2008 at 07:24 PM
Looks like we're bottoming out! It's going to be a soft landing! Buy now or be priced out forever!
Posted by: bulwark | September 17, 2008 at 07:30 PM
Hard to feel sorry for those who irresponsibly pumped the this bubble for personal gain - mortgage brokers, high finance guys, those who lied on loans, etc. Easy to feel badly for honest people who didn't understand that housing prices were going to crash hard and now are stuck.
WaitinginSoCal,
I was convinced there was gonna be a crash back in 2005. I was a heretic for saying so. My wife is on board now, even after I had to explain to the inlaws why were not buying. I have to remember who is in the room when I voice my opinions - nobody who bought a home in the last couple of years needs me to put salt in the wound.
Posted by: El Guapo | September 17, 2008 at 08:10 PM
"You were right." Sweet words from my mother-in-law last week, after insisting over the last 3 years that I buy a home. Now I can die in peace, and my wife can afford a nice home from my life insurance policy.
Posted by: iousc | September 17, 2008 at 09:42 PM
The median is skewed low. But when low end foreclosures don't dominate AND the median is down a bit below $350k we'll be at the bottom. That price level is only about 10% below where we are now.
However, given the skew, home prices in the core areas still need to fall another 20% or so before bottom. The devastated areas are probably near bottom now.
Posted by: tew | September 17, 2008 at 10:39 PM
Too many houses for sale, prices dropping, credit getting tighter, banks imploding,bad loans resetting, buyers waiting, renting cheaper than buying, Wall Street melting down, companies laying off workers etc.. etc....,
Plain and simple facts are:
We are in a downturn and it is getting worse every day. Wake up and smell the coffee.
http//www.westsideremeltdown.blogspot.com
Posted by: latesummer2009 | September 17, 2008 at 10:56 PM
"Looks like we're bottoming out! It's going to be a soft landing! Buy now or be priced out forever!
Posted by: bulwark | September 17, 2008 at 07:30 PM"
Lefty, is that you? I miss ya man!
Anyway, please explain the apparent dichotomy in your statement, if we are "bottoming out" how will I be "priced out forever" if I don't rush out and buy right now? As for a soft landing, holy shnikes, what's your idea of a hard one? Nose in at 500 mph?
Posted by: keith | September 17, 2008 at 11:18 PM
oh, bulwark, i miss those halcyon days of yore when we were all so amused by jokes like that. i appreciate the effort, but now i'm starting to feel a little bit frightened and the humour comes harder. i miss lefty and even, dare i say it, shockg, although i can't imagine laughing at even their schtick now.
Posted by: tarbubble | September 18, 2008 at 05:13 AM
I think the "American Dream" is b.s. - I dont even want a house. I am mobile, not working to pay impossibly high mortgage + property tax + repairs. I save a ton of $ each month and think the whole financial industry is a bunch of crooked liars who deserve to be paid about 30k for their "wisdom"
Posted by: jb | September 18, 2008 at 11:30 AM
Why are prices down everywhere else in So cal but Pasadena?? Pasadena, Sierra Madre, and certain surrounding communities have fallen very little, obviously it is a more desirable place to purchase except the 91103 areas, but even in these undesirable areas prices are still considerably high.
Posted by: Vatche | September 18, 2008 at 09:23 PM
In areas like Moreno Valley, since the prices have stabilized(4 bedrooms going for $150K), flips are done all the time. Buy an older foreclosure for $80K, put in $10K of upgrades, then turn it around and sell it for a little less than the average price in the area. No huge profits for each sale, but I know people making a reasonable living doing this now. I doubt that anyone can do this in the OC or even nicer parts of LA county though.
Posted by: DM | September 18, 2008 at 10:01 PM
I'm with you Vatche completely. Have been waiting patiently on sidelines for something more "affordable" to hit the San Marino and South Pas markets. I am in the 200k club like many of the posters here, and have seen very little drop in these markets. If you folks think a drop from $1.4MM to $1.175MM is bigtime, it still doesn't get people like me into those markets. Guess I will stay in Pasadena with the rest of the upper middle class private school crowd and give up on the gilded suburban dream.
Posted by: DSL | September 18, 2008 at 10:17 PM
I like that people in the Westside still live in the fantasy that the decline has not hit them. Try and sell your house fool. Nothing is moving in coastal cities or any other area that thinks they are immune to the housing crisis.
The only place that sees movement are places that show dramatically lower prices.
One last thing to note all this decline is before the regulators get back to work. You know how it goes Federal Money comes with Federal Strings and wait until qualifications get even harder to get a loan. Then the real trouble begins.
Posted by: It's a long fall to the bottom | September 19, 2008 at 12:56 PM
Shameless as this is, in what line of work are all of you making $200k+? Do tell!
Currently unemployed, looking to make a career change and a good living for once...
Disgusting plea, but consider the times...
Posted by: Hey Now | September 19, 2008 at 06:29 PM
"Shameless as this is, in what line of work are all of you making $200k+? Do tell!"
======================================
Why do I have this sneaking suspicion that they're all bankruptcy lawyers? ;-)
Posted by: foureyedbuzzard | September 20, 2008 at 08:33 AM
I don't get it. How is it that housing prices on the Westside have not fallen? It's not that the values of the houses have gone up. There is obviously a bubble, as there was everywhere else. Houses don't double in price in 5 years. So why is it taking so long?
Posted by: No Way | September 20, 2008 at 10:11 PM
52K average income = 250K that a consumer worker can qualify for and that is when the market will start to level off. Until then stand back and watch the dance of death. Hold-outs waiting for prices to climb will never see it again and need to make different plans. The down on 250K = 50K = checkmate!
Well..ta ta and enjoy the drop in prices.
or enjoy the BS'ers who keep BSing. your choice.
Posted by: Carlos Carboney | October 02, 2008 at 09:50 PM