Post by unlawflcombatnt on Aug 15, 2007 20:08:41 GMT -6
Southern California home sales down 27% over last year. In many areas, prices are also declining.
from the Los Angeles Times:
Southland home sales hit 12-year low
By Annette Haddad
Los Angeles Times Staff Writer
8/15/07
"Would-be home buyers in Southern California continued to sit on the sidelines last month, driving down home sales to their slowest pace in 12 years and pushing down prices in the region's less-expensive neighborhoods, data released Tuesday showed.
Yet even as home sales fell 27% regionwide, the median price of all homes sold in the Southland's six counties rose 3.7%, to $505,000, in July compared to a year ago, thanks to more robust sales at the upper end of the market, according to real estate research firm DataQuick Information Systems....
But now with a global credit crunch starting to curtail loans to even the most creditworthy borrowers and the specter of inflation pumping up prices of consumer goods, local real estate watchers predict that even pricey areas could soon start to see prices tumble.
The thought of the housing market weakening further overwhelms sellers such as Gretchen Rolfe, a Mission Viejo psychologist....she says she has little choice but to sell the home she has owned for three years after her monthly mortgage payment jumped about 25% last spring and her refinancing options dried up.....
Another thing Rolfe has done is lower her asking price. Since listing her house in April, she has cut the price twice, the most recent reduction coming just last week after witnessing the turmoil in the stock and credit markets....
Rolfe's strategy may work. The majority of home sales in July were transactions of $750,000 and higher, said John Karevoll, DataQuick's chief analyst.
"Sales were not strong in the entry-level neighborhoods, or even the first move-up neighborhoods, but rather in neighborhoods where households have established finances and in wealthy neighborhoods," he said.
The disparity underscores in part the growing income gap among Southern Californians and how it plays out in the real estate market. Upper-end households can afford to buy homes at today's prices, while middle- and working-class people without equity, plump bank accounts or steady paychecks -- and now a lack of available financing -- appear to be waiting for home prices to decline in more modest neighborhoods before attempting to jump back in.
Nowhere is the trend more evident than in the Inland Empire's Riverside and San Bernardino counties, the least expensive markets in the Southland. In July, Riverside County's median price fell 3.9% to $399,000 as sales slid 42%. San Bernardino's median price declined 3.1% to $355,000, while sales plunged 43%....
Los Angeles County...sales fell 23%; and Orange County...sales dipped 19.8%....
some economists believe it is now a matter of time before the weakness (in prices) spreads throughout the region, regardless of neighborhood.
"A decline in prices, like increases, tends to be self-fulfilling," said Michael Carney, director of Cal Poly Pomona's Real Estate Research Council. "If buyers see prices falling, they hold off and don't buy and cause prices to fall even further. But it takes a while.
"The different counties don't move in different directions," he added...."