Southland Home Sales Flat, Prices Edge Down

Februry 15, 2012

La Jolla, CA---The Southland housing market started 2012 with slightly higher sales and slightly lower prices despite record-low mortgage interest rates. Home sales skewed toward the lower price ranges, which is normal for January, as many traditional buyers retreated and investors snapped up homes at a record level, a real estate information service reported.
A total of 14,523 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was down 24.5 percent from 19,247 in December, and up 0.4 percent from 14,458 in January 2011, according to DataQuick of San Diego.
Sales have increased year-over-year for five of the last six months. The sharp sales decline from December is normal for the season. Last month’s sales count was 17.8 percent below the 17,671 average for all the months of January since 1988.
A total of 669 newly built homes sold in January, the lowest number for any month since DataQuick started keeping track in 1988.
“January numbers have never been very good at providing an indication of what upcoming activity will be like. For that we need to wait until March. What we can determine is that the mortgage market remains dysfunctional. It will be interesting to see how a potential surge of refinance activity plays into the purchase market once the administration’s new guidelines are implemented,” said John Walsh, DataQuick president.
The median price paid for a Southland home last month was $260,000, down 3.7 percent from $270,000 for both December and January last year. The median was the lowest since $249,000 in May 2009. The median’s low point for the current real estate cycle was $247,000 in April 2009, while the high point was $505,000 in mid 2007. The peak-to-trough drop was due to a decline in home values as well as a shift in sales toward lower-cost homes, especially inland foreclosures.
Distressed sales made up more than half of January’s resale market.
Foreclosure resales – properties foreclosed on in the prior 12 months – made up 32.6 percent of resales last month, up from a revised 32.4 percent in December and down from 36.8 percent a year earlier. Foreclosure resales hit a high of 56.7 percent in February 2009 and a low of 32.8 percent last June.
Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 21.3 percent of Southland resales last month. That was a high for the current real estate cycle and compares with 19.6 percent in both December and January 2011.