Home sales across Southern California remained weak in July, falling an annual 27.4 percent to their lowest level for that month since 1995, but the median price did move up to match March’s record, an industry tracker reported.
Despite the sales slide, the median price gained 3.7 percent from a year ago to $505,000 across the six-county region, driven by more transactions in the market’s higher-priced areas, said La Jolla-based DataQuick Information Systems.
Los Angeles County was the only market to see an annual price increase, rising 5.3 percent to $547,500, the second-highest median on record.
In July 1995 the median price was $152,000 for the region and $155,000 for Los Angeles County.
Last month 17,867 new and resale houses and condominiums changed owners, 11.4 percent fewer than in June, the company said.
“We’re probably at or close to a floor level of (sales) activity,” DataQuick analyst John Karevoll said.
While foreclosures hit a record level in the second quarter, that hasn’t prompted a price plunge because the region’s economy is still sound.
DataQuick did note that when adjusted for shifts in market mix — for example, fewer lower-cost homes selling now — year-over-year price changes went negative in January and are now roughly 3 percent below year-ago levels.
The declines are in the lower half of the market, while prices are flat or even increasing in the upper half of the market.
Last month’s sales were the slowest for any July since 1995, when 16,225 homes sold, the lowest for any July in DataQuick’s statistics, which go back to 1988. In contrast, the strongest July was in 2003, when 38,996 homes sold.
The average for July is 26,829 sales.
“These are interesting times because the slowdown in home sales isn’t part of a broader economic slowdown, it’s a post-frenzy re-balancing act,” DataQuick president Marshall Prentice said.
In 1995, Southern California had been in recession for a few years and jobs were being lost in large numbers as people were leaving the area. That was enough pressure to push down prices.
“The irony is that the overall economy is not doing badly and people are still moving to Southern California,” said Jack Kyser, vice president and chief economist at the Los Angeles County Economic Development Corp.
DataQuick’s report noted that:
*In Los Angeles County, sales fell 23 percent to 6,809 transactions.
*In Ventura County, the median price slipped 5.1 percent to $582,500 and sales fell 16.7 percent to 784 transactions.
*In Riverside County, the median price fell 3.9 percent to $399,000 and sales plunged 41.9 percent to 2,769 transactions.
*In San Bernardino County, the median price dipped 3.1 percent to $355,000, and sales plunged 42.6 percent to 2,008 transactions.
In July, the typical monthly mortgage payment that Southland buyers took on was $2,447, up from $2,430 the previous month, and up from $2,413 a year ago.
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Adjusted for inflation, current payments are 11.4 percent above typical payments in the spring of 1989, the peak of the prior real estate cycle.
They are 1.4 percent below the current cycle’s peak one year ago.
Foreclosure resales accounted for 8.3 percent of July’s sales activity, up from 7.7 percent in June, and from 2 percent in July of last year.
DataQuick said that foreclosure resales do not yet have a marketwide effect on prices, although pockets of foreclosure discounts are emerging in some local areas.
Kyser expects the same kind of results in the months ahead because of tighter lending standards and some mortgage products being taken off the market.
“I think it’s going to take awhile to work out,” he said of the sales slump. “People are going to have to get their confidence back.”