Home/Mortgages/Southern California Home Sales Increase, but Prices Continue to Drop

September 14, 2011 (Chris Moore)

New and existing home sales in Southern California increased in August benefitting from a high number of business days on which home sales could be recorded but home prices weren’t so lucky as they continued to trend downward 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 19,654 new and re-sale homes in August. That was up 11.9 percent from the 18,090 homes sold in July, but 26.6 percent below the August historical average of 26,761 sold homes. Sales were 6.0 percent higher than August of last year when 18,541 homes were sold.

However, when comparing the average number of homes sold on a daily basis, a different view of how sales trended appears. August had 23 business days on which home sales could be recorded compared to 20 days in July. The average number of homes sold per day in August was actually six percent lower than in July and were less than one percent higher than in August 2010.

A total of 1,184 new homes were sold across the six counties last month, up from 1,022 sold the previous month, but a 14.3 percent drop from August of last year. It was the lowest amount of new home sales for the month of August since DataQuick started keeping records in 1988.

“Scratch beneath the surface and there’s not a lot to cheer about this month. Home sales were up from a year earlier but remained far below average. Many would-be buyers can’t find financing, and others who want to make a move now are stuck because they owe more than their homes are worth. Financial markets are increasingly choppy, the political outlook is incredibly murky and consumer confidence remains poor. Needless to say, it’s not an environment ripe for stabilizing the housing market,” said John Walsh, DataQuick president.

The median price paid for all new and re-sale homes in the Southern California region in August was $279,000, which was down 1.4 percent from $283,000 last month. The median price was also down 3.1 percent from $288,000 in August of 2010. The median price for a home in the area at the current housing cycle’s peak in mid-2007 was $505,000.

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

Distressed properties accounted for 52.5 percent of the re-sale market in August with foreclosure re-sales accounting for 34.6 percent of the market while short sales made up an estimated 17.9 percent of re-sales.

Cash buyers accounted for 28.5 percent of the homes sold for the month, down from 28.7 percent in July, paying a median price of $210,000 for their purchases. Absentee buyers accounted for 24.6 percent of all sales, up from 23.9 percent in July, paying a median price of $197,000 for the homes they purchased. Nearly 60 percent of the absentee buyers paid cash for their purchases.

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