Southland home sales slow to 1999 pace, prices leveling off

June 20, 2006

La Jolla,CA----Home sales in Southern California slowed for the sixth month in a row, making last month the slowest May since 1999. Homes are appreciating in value at their slowest pace in almost six years, a real estate information service reported.

A total of 27,286 new and resale homes were sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was up 10.3 percent from 24,748 for the month before, and down 11.7 percent from 30,886 for May a year ago, according to DataQuick Information Systems.

While last month was the slowest May since 1999 when 25,404 homes were sold, sales were still above the May "average" May of 24,857 (going back to 1988). The strongest May was in 2002 when 32,391 homes were sold, the slowest was in 1993 when 15,001 were sold.

"The slowdown in sales appears to be most noticeable in the move- up category, which was expected. Prices are flattening out in that market. Entry-level and mid-market homes are not seeing as much of a sales slowdown, and prices are still going up, although at a slower pace," said Marshall Prentice, DataQuick president.

The median price paid for a home in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties was $485,000 last month. That was the same as April, and up 6.4 percent from $456,000 for May last year.

The 6.4 percent year-over-year increase was the lowest since July 2000 when the $205,000 median was up 6.2 percent from $193,000 a year earlier. The median peaked in March at $486,000, and current trends indicate it may peak again this summer.

DataQuick, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates, monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

The typical monthly mortgage payment that Southland buyers committed themselves to paying was $2,376 last month, up from $2,354 for the previous month, and up from $2,028 for May a year ago. Adjusted for inflation, current payments are about 6.2 percent above typical payments in the spring of 1989, the peak of the prior real estate cycle.

Indicators of market distress are still largely absent. Financing with adjustable-rate mortgages has dropped during the last six months. Foreclosure activity is edging up from its bottom, but is still low. Down payment sizes are stable, as are flipping rates and non-owner occupied buying activity, DataQuick reported.

All Homes	No Sold May-05	No Sold May-06	Pct. Chg	Median May-05	Median May-06	Pct. Chg
Los Angeles	10,128	9,654	-4.7%	$459K	$509K	10.9%
Orange County	4,548	3,113	-31.6%	$590K	$635K	7.6%
San Diego	5,141	4,217	-18.0%	$488K	$490K	0.4%
Riverside	5,985	5,468	-8.6%	$381K	$417K	9.4%
San Bernardino	3,660	3,756	2.6%	$308K	$361K	17.2%
Ventura	1,424	1,078	-24.3%	$569K	$586K	3.0%
So. California	30,886	27,286	-11.7%	$456K	$485K	6.4%

Source: DQNews.com

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