Southern California's housing market continues to be racked by falling prices and declining sales volume, a real-estate information service...
Southern California’s housing market continues to be racked by falling prices and declining sales volume, a real-estate information service reported Wednesday.
The median home-sales price was $355,000 in June, down 29.3 percent from a year ago. Home values are now on par with what they were in early 2004.
The figure of 17,424 homes sold in Southern California was down 13.6 percent from the same month a year ago and the lowest sales total recorded by DataQuick Information Systems, the La Jolla, Calif., company that has been tracking area home sales since 1988.
The volume of home sales did rise 3 percent from May, but analysts attributed that uptick to bargain hunters snapping up foreclosed homes at steep discounts.
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While most industry analysts believe prices will continue falling, they disagree over how much further they will drop.
Los Angeles economist Christopher Thornberg, principal of Beacon Economics, said home prices remain out of sync with what buyers can afford to pay. Thornberg said prices must fall to 40 percent below the peak to match incomes.
In Riverside County, Calif., where prices already have dropped 36 percent from the peak, monthly home sales this year recently have begun to surpass last year’s levels. In June, for instance, Riverside County home sales were up 12 percent from a year ago. “Prices are down so much it’s starting to correct,” Thornberg said.
Thornberg said areas that have had smaller declines must see prices fall more before they begin to recover.
But Richard Green, newly appointed director of the University of Southern California’s LuskCenter for Real Estate, said prices might be nearing the bottom even in higher-priced areas. Green has been shopping for a house for himself in the Pasadena area.
“Two years ago I never would have bought a house” in the neighborhoods he is now shopping, he said. Green estimates that homes he is considering have fallen about 20 percent in value since then, he said.
Prices at the top end of the market, which have held up better than those at the lower end, are now showing sharp declines. In June, the sales price of homes valued in the top tenth of the market declined 20 percent, according to DataQuick.
Foreclosed homes made up 41.1 percent of the homes sold in June, the first time the percentage has topped 40 percent in this real-estate cycle. Last June, foreclosed homes made up just 7.3 percent of home sales.