Though the median sale price continued edging up for transactions in Southern California last month, home sale totals dipped – the result of a thinning inventory of foreclosure properties and financial uncertainty among potential home buyers, according to MDA DataQuick.
A total of 21,502 new and resale homes sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in August. That was down 10.8% from 24,104 in July, and up 11% from 19,366 in August 2008.
The decline from July to August was unusual, DataQuick says, given an increase is normal for the season. August sales in DataQuick's statistics, which go back to 1988, range from a low of 16,379 in 1992 to a high of 39,562 in 2003. The average is 27,458.
"There's still a lot of uncertainty out there about prices, interest rates and the availability of mortgage money," comments John Walsh, DataQuick president. "Additionally, we don't know if this drop in foreclosure resales is temporary. We're hearing from public agencies and the banking industry that there's still a lot of financial distress in the pipeline."
Foreclosure resales accounted for 38.8% of August's resales activity, down from 40.7% in July. In February, it peaked at 56.7%. Most of the relative decline is due to an increase in non-foreclosure resales, DataQuick says.
The median price paid for a Southland home rose to $275,000 in August from $268,000 in July, though DataQuick notes that changes in the median do not necessarily correspond to changes in home values in the current, atypical sales environment.
Adjusting for shifts in market mix, it now appears that over the past two years homes in older, more costly neighborhoods have come down in value by about half as much as homes in newer, more affordable neighborhoods.
Prices also fell sharply in some lower-cost, older communities where the use of risky subprime loans was high, triggering relatively high foreclosure rates.
SOURCE: MDA DataQuick