Home Prices Down in Southern California

Southern California home sales turned in another lackluster month in March, the result of a fussy mortgage market, slow job growth and a continued wait-and-see attitude among potential buyers and sellers. There were signs, however, that the market was a little less dysfunctional than in recent months, a real estate information service reported.


A total of 19,412 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in March. That was up 35.1% from 14,369 in February, and down 5.2% from 20,476 in March 2010, according to DataQuick. The San Diego firm tracks real estate trends nationally via public property records.

Sales always increase from February to March. Last month's sales count was 21.4% below the 24,706 average for all the months of March since 1988. Sales so far this year are 20% below the norm. During the last half of 2010 sales were 25-30% below average.

Sales of newly built Southland homes totaled 1,144, the lowest March in DataQuick's statistics, which go back to 1988. The peak March was in 2006 with 7,205 sales. The March new-home average is 3,661.

The median price paid for a Southland home last month was $280,500, up 2.0% from $275,000 in February, and down 1.6% from $285,000 for March a year ago.

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 low-cost homes, especially inland foreclosures .

"As an indicator of upcoming trends, the month of March is actually pretty reliable. We got off to a slow start with sales this year and it doesn't look like that will change anytime soon. Two of the likely game changers in the short run would be a surge in job creation or another round of price corrections," said John Walsh , DataQuick president.

"The foreclosure issue is going to be with us for a good while. But mortgage availability, or rather the lack thereof, is key. If a well-crafted home loan program comes down the pike, it's going to make some lending institution the dominant player, at least for a while," he said.

 Foreclosure resales - properties foreclosed on in the prior 12 months - made up 36.4% of resales last month, down from a revised 37.0% in February and down from 38.3% a year ago. Foreclosure resales hit a high of 56.7% in February 2009 and a low of 32.8% last June.

Short sales - transactions where the sale price fell short of what had been owed on the property - made up an estimated 18.5% of Southland resales last month. That was down from an estimated 19.6% in February but up from 18.0% a year earlier and 12.2% two years ago.