Southland prices fall again; sales perk up

December 18, 2007

La Jolla,CA----Southern California home sales bucked the seasonal norm in November and rose slightly over October, thanks to bargain shopping and an uptick in new-home sales. But it remained a chilly market by historical standards: Sales were the slowest for a November in at least 20 years and the median sale price posted a record 10.3 percent year-over-year decline, a real estate information service reported.

A total of 13,173 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in November. That was up 2 percent from 12,913 sales in October, and down 42.7 percent from 23,005 in November last year, according to DataQuick Information Systems.

Last month's sales were the lowest for any November in DataQuick's statistics, which go back to 1988. The previous low was in November 1992, when 15,446 homes sold. November has averaged 22,749 sales over the last 20 years.

Sales usually decline between October and November, with that drop averaging 7.4 percent over the past two decades. Last month marked only the third November since 1988 in which sales rose above October, and it was almost entirely the result of an 11.5 percent increase in sales of newly built houses. The number of single-family houses that resold in November was about even with October, while condo resales fell 6 percent. The sales are based on the number of escrows that closed each month.

"Last month shows how lower prices have lured some people back into the market – especially the new-home market, which claimed the lion's share of the November sales gain," said Marshall Prentice, DataQuick president.

"Some might point to the October-to-November increase as evidence sales have bottomed out," he continued, "but we'll need to see a sustained trend. We also saw November sales rise a bit back in the troubled market of 1994, well before it hit bottom. It's worth noting, though, that sales financed with conforming loans have increased each month since September, and last month we saw signs that the jumbo loan problem, while unresolved, wasn't worsening."

Sales financed with conforming loans, or mortgages up to $417,000, increased 3.5 percent from October to November, while jumbo-loan purchases, where the mortgage exceeded $417,000, declined 0.1 percent. Compared with a year ago, conforming loan purchases fell 31.2 percent in November, while jumbo sales tumbled 69.3 percent.

The median price paid for a Southland home was $435,000 last month, down 2.2 percent from $445,000 in October, and down 10.3 percent from $485,000 in November last year. That year-over-year decline is the largest for any month in DataQuick's records. Last month's $435,000 median was the lowest since March 2005, when it was also $435,000.

The median has been tugged down by depreciation, as well as the sharp decline in sales of mid- to higher-priced homes bought with jumbo mortgages.

Jumbo-financed purchases represented nearly 40 percent of sales this year before the August credit crunch, while last month they accounted for 22 percent. Also, the number of homes purchased with the highest conforming loan possible - $417,000 - has roughly doubled since jumbo loans became pricier and harder to obtain in August.

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 $2,064 last month, down from $2,111 the previous month, and down from $2,255 a year ago. Adjusted for inflation, the current payment is 6.2 percent lower than the spring of 1989, the peak of the prior real estate cycle. It is 17.7 percent below the current cycle's peak in June last year.

Indicators of market distress continue to move in different directions. Foreclosure activity is at record levels, financing with adjustable-rate mortgages and with multiple mortgages has generally declined this year. Down payment sizes and flipping rates are stable, while non-owner occupied buying activity has edged higher, DataQuick reported.

All Home Sales	No Sold Nov-06	No Sold Nov-07	Percent Change	Median Nov-06	Median Nov-07	Percent Change
Los Angeles	8,274	4,468	-46.0%	$517,000	$499,000	-3.5%
Orange	2,867	1,567	-45.3%	$623,000	$582,750	-6.5%
Riverside	4,406	2,503	-43.2%	$427,000	$356,500	-16.5%
San Bernardino	3,309	1,719	-48.1%	$380,000	$330,000	-13.2%
San Diego	3,248	2,400	-26.1%	$487,000	$440,000	-9.7%
Ventura	901	516	-42.7%	$577,500	$521,250	-9.7%
SoCal	23,005	13,173	-42.7%	$485,000	$435,000	-10.3%

Source: DQNews.com

Media calls: Andrew LePage (916) 456-7157
or John Karevoll (909) 867-9534

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