Southern California Homes Sales Rise Again

Posted by: Chris Palmeri on July 15, 2009

califonria mountains.jpg

The number of homes sold in June in Southern California rose to their highest level since 2006. The enticement: Price declines of as much as 26% from a year ago.

A total of 23,262 houses and condos changed hands in Southern California last month, according to the San Diego-based research firm MDA DataQuick. That was up 12.0 percent from 20,775 homes in May and up 29.0 percent from 18,032 a year ago.

Southern California had been one of the most feverish markets during the housing boom. Now it looks to be crawling out of the bust.
Sales have increased year-over-year for 12 consecutive months. June’s sales were the highest for that month since 2006, when 31,602 homes sold. June sales peaked at 40,156 in 2005 and hit a low last year.

Foreclosures were a major force in the market, but their impact eased for the third consecutive month. Homes that sold in June that had been foreclosed on in the prior 12 months – represented 45.3 percent of sales last month, down from a peak 56.7 percent in February of this year.

Lower prices are enticing buyers. The median price paid for all houses and condos was $265,000, up 6.4 percent from May but down 26.4 percent from $360,000 a year ago. It was the second consecutive month in which the median rose on a month-over-month basis.

Lower prices mean people can actually afford their mortgages. The typical monthly mortgage payment that Southern California buyers committed themselves to paying was $1,193 last month, down from $1,762 a year ago, Dataquick says. Adjusted for inflation, current payments are 46.0 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 55.7 percent below the current cycle’s peak in July 2007.

Sales of single-family houses priced $500,000 and above rose to 19.6 percent of all existing houses sold in June. That category had been as little as 13.4 percent of sales in January.


“The rising median should still be viewed mainly as a sign the market’s moving back toward a more normal distribution of sales across the home price spectrum,” said John Walsh, DataQuick’s president. “What’s missing, still, is a wide-open financing spigot for the would-be buyers of these more expensive homes.”

Bank of America made the most home purchase loans in Southern California with about 20 percent of the market. Wells Fargo has 10 percent of the market.

Investors bought 18.6 percent of the homes sold last month, up from 16.1 percent a year ago but down from 19.5 percent in May. The monthly average since 2000: 15 percent.

Reader Comments

zina

July 16, 2009 8:29 PM

Most of this is caused by investors and first time buyers who think that this is their last chance to buy. Both of these are inflating prices just like it happened in 2003, 2004,2005. I think this is going to hurt the market, it is not a healthy recovery.

Matt Lechner

July 16, 2009 8:41 PM

IS IT TRUE OR ARE THEY JUST MAKING UP A LIE OF CONVENIENCE SO THEY CAN PASS AROUND SOME OF THEIR FUNNY IOU's ?

CALIFORNIA-STYLE FRAUD

WHAT IOU's ?

Richard

July 18, 2009 12:41 PM

Real estate is again being used as a
place to park the investor's money.
With interest rates pushed to nothing,
the money wants to flow towards a place
where a better return can be generated.

This means rental properties, assuming
that the job market does not collapse
further because of bad commercial loans,
credit card defaults, and all the new
programs pushed by the left such as
"free" health care for illegal aliens
and "cap and trade" carbon "fees".
This is a bounce and the ball will go
down further before its done.


This is not to say that there are no
bargains out there provided you have
the resources and the daring to seize
them. Moderately priced apartments
can generate a nice income if the
government does not make the situation
that much worse ala FDR.

Doug

July 20, 2009 6:34 PM

Financing is still very difficult to get in California (and I assume elsewhere too).

Bill

July 23, 2009 4:11 PM

AUDIT YOUR MORTGAGE LENDER....
Are you behind on your mortgage??
You may be victim of FRAUD or PREDATORY LENDING.
Your lender may have over charged you.
A Forensic Loan Audit can find VIOLATIONS that may help you force a settlement with your lender and potentially lead to a reduction in your principal balance and/or interest rate.
We give you the ammunition to confront your lender.
www.homedefenseteam.com
866-544-9679 x2086

ANSH@homes in yuba city

July 28, 2009 6:32 PM

Hi,
here you have posted very nice and very interesting post. I like it very much. Thanks for sharing your valuable thoughts. I hope this conversation will remain in future. Thanks for sharing the information.

Post a comment

 

About

BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

BW Mall - Sponsored Links

Buy a link now!