January 19, 2009 / 9:38 PM / 9 years ago

South California home sales up 50 percent but prices fall

LOS ANGELES (Reuters) - December home sales in Southern California jumped 50.5 percent from the year earlier, but the median price fell 34.6 percent to $278,000 as shoppers snapped up foreclosed properties, MDA DataQuick said on Monday.

The area’s median price, which reflects the midpoint of sale prices, hit $505,000 in mid-2007, DataQuick said.

A total of 19,926 new and resale homes and condominiums sold last month in the six-county region that is the most heavily populated area in the state of California.

The area, including such cities as Los Angeles, San Diego and Riverside, recorded 13,240 sales during December 2007.

The median price paid for homes sold in Southern California hit $278,000 in December, down from $425,000 in December 2007.

DataQuick said the drop in the median price “overstates the decline in home values” since more affordable homes in the foreclosure-hit inland markets accounted for a large portion of sales.

Regionwide, foreclosure resales accounted for 55.7 percent of December’s resales, up from 24.3 percent in December 2007.

California’s residential real estate market was one of the most expensive in the United States during the years-long housing bubble. The state is now struggling with one of the nation’s highest foreclosure rates after many buyers got in over their heads with debt.

Formerly sidelined buyers are rushing to snap up foreclosed homes, but many would-be buyers in expensive markets remain on the sidelines because financial institutions are reluctant to make so-called “jumbo” loans required to pay for homes in California’s many high-price neighborhoods.

“Mortgage interest rates last month were near record lows ... It does look like the spigot is being opened a little bit, at least for low-cost home purchases,” said John Walsh, president of MDA DataQuick.

December 2008 was the fifth-slowest December in DataQuick’s records, which reach back to 1988. December 2007 was the all-time slowest, followed by 1995, 1990 and 1991.

The research company said an average December has 25,277 sales. The strongest December result was in 2003 when 36,865 Southern California homes sold.

Reporting by Lisa Baertlein

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