Fire sale: SoCal home sales spike 65% as prices slide

Breaking news: Sales of existing homes in Southern California shot up 65% in September from year-ago levels, as prices continued their historic decline and bargain-hunters snapped up foreclosed houses, MDA DataQuick reported this morning. The research firm cautioned, however, that the September statistics do not reflect the impact of the financial crisis, which may weaken sales in coming months.

Median prices in the region fell to $308,500 in September, down 33% from year-ago levels. Prices fell $21,500 from August to September, a decline of about $1,000 every business day. Half of the houses sold in the region in September had recently been foreclosed on, MDA DataQuick reported.

"The pitifully low September 2007 sales numbers weren't tough to beat," said MDA DataQuick president John Walsh. "More impressive was that this September's sales volume bucked the seasonal norm and rose above August. Steep price declines, especially inland, have improved housing affordability quite a bit and may keep sales level swell above the record lows we saw late last year and early this year."

Walsh warned, however, that the market may have worsened in October: "You have to view last month's sales in the proper context," he said in a news release. "The represent escrow closings, which reflect purchase decisions made in mid-to-late summer. That was before the dramatic worsening of the nation's economic crisis in recent weeks. Over the next few weeks our sales data will begin to show how the meltdown in financial markets this fall has impacted housing demand."

The "fire sale" buying is strongest in the region's cheapest area, the Inland Empire, where prices are falling the fastest. In Riverside County, September sales were more than double year-ago levels, while median prices fell 37%, to $237,500; In neighboring San Bernardino County, sales spiked 88% from year-ago levels, whilc prices fell 37%, to $205,000.

Prices paid in Los Angeles County fell $20,000 from August, to $360,000 -- a decline of 31.4% from year-ago levels.

More to come.

--Peter Viles

Photo Credit: Bloomberg News.

Comments

[What is my next move?]

Laker said:

"have no other debt. If you have 100K down, you can buy a $480K house. That is it."

and

"However, if you tried that 2 years ago, you could have qualified for a 1 Million dollar loan with no problem...."

So my point is that prices have to decline to where loans can be written. Whether I want the house means nothing if I (and others in my situation) cannot qualify under today's rules.

P.S.: My AGI is 80K since my gross income is reduced by business expenses.

[E]

SanDiegan is correct. Medians may very well rise. Haven't you seen the pigs that have been selling? It's almost as if everybody that went into foreclosure bought the worst house on the block...or so it would seem. The nicer foreclosures are yet to come. They will be in the high end areas so of course median prices will be higher...the actual home prices will be lower in that upper strata however.

Repeat after me.

Alt-A Neg-Am Liars Loan.

Any mortgage modification on a loan like this would be far less profitable than selling the house in foreclosure.

Look for the high end foreclosures to ramp up in 2009. No president is going to bail out the "rich" homeowners in upper tier homes. This is part of the "change" you will see. The poor folk have already been cast out of their exurban Mchomes. Why would they feel sorry if the "rich" folk get their "comeuppance"? Try to get the masses to rally behind that one. They'll be out with pitchforks and torches if the wealthy get to keep their Hollywood Hills homes on their (perceived or not) dime.

[smrr]

my god.
mr. whatsnextmove80k. i earn 150. my wife 150. she's in tv so it's not dependable forever. but i couldn't imagine paying more than 3000 for a mortgage payment. really 2250 or 2500. i've got 150 for dp. but, i mean, how do you say you can pay 5-6k per month in mortgage? do you not eat? are you without any retirment or health plans? do you not have sattelight television or do you have a really lame package. oohhhhh. self-employed. i get it. you don't pay taxes. I'm calling the IRS on you so you can pay your fair share of the mortgage-wallstreet-entertainment-military-industrial complex-bailout.

[Ace]

E "It's almost as if everybody that went into foreclosure bought the worst house on the block...or so it would seem."

Yeah, it sure seems that way. I see so many foreclosures around that valley that are on a busy street or like 10 feet from the freeway. I have personally not seen very many foreclosures that are actually nice houses. The banks are sitting on those still trying to work short sales. They don't seem to want to foreclose if they have any possible chance of a short sale.

[Doug in Toronto]

HGTV should be happy. More flips = more programming. THe fact that most of these flips will be unsellable in today's market is irrelevant when you're selling "get rich by flipping houses" programming. Oh, and these houses most certainly are flips: most folks I know in SoCal have battened down the hatches and aren't buying anything they don't need to.

[TO]

Hello First Time Blogging

I sure hope the home prices come down in 2009. I was fortunate to buy a small home about 8 years ago right before the prices went up. It's currently being rented and I am looking to buy "myself" a home. I currently live with someone and my expenses are very low. Do you have any suggestions on when you think a "good" time to buy will be. The inventory of houses is quite scarce in my opinion. It seems that they are not staying in the market very long. I am just afraid that if the economy begins to bounce back, that I miss the boat.