Wikinvest Wire

SoCal home prices plumb new lows

Monday, June 16, 2008

It was the slowest May in 20 years according to DataQuick's monthly report on Southern California real estate sales. Prices continue to plunge, the annual decline in San Bernardino requiring the opening up of the -30 to -40 percent scale on the chart below.
All six counties now show annual declines of 20 percent or more, San Diego and Los Angeles Counties being the last holdouts. Though the median price is certainly being influenced by more sales at the low end, these are some pretty hefty moves down.

In another few months or so, the year-over-year comparisons will get a bit easier. As shown below, prices really started to drop late last summer, so, once fall arrives the annual declines should ease up.
From the peak, home prices are down 34 percent in San Bernardino and 33 percent in Riverside - back to June 2004 prices for the former and February 2004 for the latter. You have to go back to May of 2003 to find today's May's median home price of $380,000 in San Diego.

Hey, housing is becoming affordable again!

(Not is affordable, but is becoming affordable)

Driven by foreclosures sales that made up more than half of the total, the number of sales compared to a year ago actually rose 4.1 percent in Riverside last month and, in San Bernardino, sales were down only 6.5 percent.
Marshall "almost all if not all of those gains are here to stay" Prentice, President of DataQuick, handed the commenting duties to analyst Andrew LePage for this month's report:

What horsepower this market can generate right now is mainly fueled by bargain shopping, especially by first-time buyers and investors in inland areas. Meanwhile, sales remain especially slow in most higher-end markets, with jumbo mortgages (over $417,000) making up only a slightly higher percentage of all purchase loans in May than in April. That doesn't bode well for the high-end, where so far prices have come off their peaks but have generally held up best.
Sales at the high-end will start to pick up soon enough and there will be bargains there as well. Of course, the high-end won't be nearly as high as the sellers would hope.

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