Home/Mortgages/Southern California Home Sales and Prices Tumble in October

November 16, 2011 (Chris Moore)

Monthly sales of new and existing homes in Southern California continued to decline in October while home prices tumbled back to last January’s levels according to real estate information provider DataQuick.

Sales in the Southern California region, which includes Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties, totaled 16,829 new and re-sale homes in October. That was down 7.3 percent from the 18,149 homes sold in September and 29.3 percent below the October historical average of 23,819 sold homes. Sales were only 0.5 percent higher than October of last year when 16,744 homes were sold.

Sales typically fall 0.7 percent from September to October and have varied from a low of 12,913 in 2007 to a high of 37,672 in 2003.

New home sales were at their lowest level on record for an October, falling 18.4 percent below last years levels, while sales of existing single-family homes were 2.2 percent higher and existing condos were 1.3 percent higher than in October of last year.

In the first month following the reduction in the loan limits, the share of homes sold over $500,000 dropped to 17.4 percent of all homes sold, down from 20.4 in September and 20.8 percent a year earlier. It was the lowest portion of sales in the $500,000+ price range since May 2009.

“For a few months now, lower prices and amazingly low mortgage rates have kept resale activity slightly ahead of last year. Of course, that’s not saying a lot when you consider sales were 25 to 30 percent below average. The market continues to struggle with a difficult lending environment, uncertainty among potential buyers, underwater homeowners who can’t move up, and a weak job market. The lower conforming loan limits implemented last month help explain the relatively sharp drop in mid- to high-end sales during October. Now we’ll have to see if the private loan market can fill the void,” said John Walsh, DataQuick president.

The median sales price paid for all new and re-sale homes in the Southern California region in October was $270,000, the lowest median price reported since January of this year. The price was 3.6 percent lower than the $280,000 median price posted in September and 4.6 percent lower than in October of 2010 when the median price was $283,000.

The highest median sales price for homes in the region during the current housing cycle’s peak was $505,000 in mid-2007 while the lowest was $247,000 in April 2009.

The median sales price has declined year-over-year for the past eight months and has declined or remained unchanged since December 2010.

Distressed properties accounted for 52.5 percent of the re-sale market in October, up from 50.8 percent in September, with foreclosure re-sales accounting for 32.8 percent of the market while short sales made up an estimated 19.7 percent of re-sales.

Cash buyers accounted for 29.4 percent of the homes sold for the month, up from 28.5 percent in September, paying a median price of $204,000 for their purchases. Absentee buyers accounted for 25.1 percent of all sales, up from 24.3 percent in September, paying a median price of $200,000 for the homes they purchased.

Tags: DataQuick, Southern California, new homes, re-sale homes, median price, home sales, investors, absentee buyers