Tuesday, January 20, 2009
Yesterday, Dataquick reported that the December median home price across all of Southern California dropped further below the $300K mark to just $278K.
Recall that the November data revealed the first sub-$300K median price since April of 2003 at $285K.
As shown to the right, this all represents quite a tumble from the all-time highs reached back in 2005, 2006, or 2007, depending upon the area.
Inland Empire home prices have now breached the threshold of a 50 percent decline from the peak, something that would have been unthinkable just a couple years ago when the counties of Riverside and San Berdoo were flying high.
These two counties posted the strongest gains late in the bubble inflation phase, but then quickly passed the other areas when the bubble burst as shown below.
For the year 2008, annual price declines ranged from 30 percent in Los Angeles County to 43 percent in San Bernardino.
My old stomping ground of Ventura County is right in the middle of the pack with a 36 percent decline, taking third place in the "Down from the Peak" measurement with a whopping 46 percent drop from the high of $630K in December of 2005.
Looking at recent comparable sales in our old neighborhood, it seems clear to me that the low-end distressed sales are pushing the median price way below what other home price measures would indicate.
Of course this is just one neighborhood, but a back-of-the envelope calculation indicates that the $338,000 median price in Ventura County is as much as $50,000 lower than it would be if it included a broader mix of sales. Since higher end homes just aren't moving, when they do start moving, even though their prices may continue to fall, they'll tend to push the median price up.
Since Marshall "almost all if not all of those gains are here to stay" Prentice is now retired, new DataQuick President John Walsh provides the commentary, this month about homebuilders:
The builders are in a holding pattern, staying alive until the market recovers. Mortgage interest rates last month were near record lows. Of course, that doesn't mean much if the money isn't actually being lent. It does look like the spigot is being opened a little bit, at least for low-cost home purchases.Why does he think they're staying alive? According to this NY Times report, banks are now shutting down even the most successful homebuilders.
But, there's good news for those real estate brokers, sales agents, and title companies that have managed to survive - home sales are way up, foreclosures accounting for an astounding 55.7 percent of all home sales last month.
Cue the music!