SoCal housing market kicks off 2011 with a slump

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Southern California’s housing market kicked off 2011 with a slump. Sales were at their worst level for a January in three years and prices also dipped.

The price declines, which were steepest in the Inland Empire, were driven by a shift toward cheaper homes and foreclosures. The number of cash buyers and investors also increased.

Sales fell 5.9% in January from the same month a year earlier to 14,458, according to research firm DataQuick Information Services of San Diego. Month-over-month sales declined 26%, but such a drop from December to January is typical.

The median home price for all home types in the six-county region was $270,000, a 0.6% decline from January 2010 and the first year-over-year drop since October 2009. Last month’s median was also a 6.9% drop from December and the lowest level since July 2009.

Analysts typically don’t view January and February as good reads on how the year will progress. But if the weakness continues through the traditionally busy spring shopping season, then that could be cause for concern.

‘Lots of potential buyers continue to hold back, waiting for a sign prices have bottomed, that their jobs are safe or that loans are easier to get,’ DataQuick President John Walsh said. ‘Meanwhile, plenty of potential sellers are waiting for a stronger market.’

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-- Alejandro Lazo