Sales and home prices inch up in Southern Calif.

AP News
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Posted: Dec 16, 2009 8:16 AM

Sales and prices of homes in Southern California may be showing signs of life, with an increase in sales and prices last month from the same time last year and an unexpected jump in new-home sales, a tracking firm said Tuesday.

San Diego-based MDA DataQuick said the sales have been stoked in recent months by several factors: The federal tax credit for first-time buyers, which would have expired last month before it was extended and expanded; robust investor activity, especially inland; record-low mortgage rates; the availability of government-insured, low-down-payment mortgages for first-time buyers; and the allure of "deals" for distressed properties.

A total of 19,181 new and resale homes sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange Counties last month. That was down 13.3 percent from October's 22,132, but there is almost always a decline in home sales from October to November, according to DataQuck.

The sales were up 14.7 percent last month from 16,720 for November 2008, DataQuick said.

The median price for a home in Southern California also edged up. It was $285,000 last month, up 1.8 percent from $280,000 in October and the same as November 2008. Last month was the first since September 2007 that did not see a year-over-year decline in the median price, said DataQuick.

Last month's median was 43.6 percent lower than the peak Southland median of $505,000 reached during several months in early and mid-2007.

But the decline in the median from its peak is somewhat misleading, according to DataQuick. The median's fall from its peak overstates the decline in the typical home. The decline in home values in more costly established neighborhoods was half that of the decline in homes in newer more affordable neighborhoods in inland growth areas.

Foreclosures resales _ those properties sold in November that had been foreclosed upon in the prior 12 months _ are slowing down as well, DataQuick said. They made up 39.1 percent of all Southland resales, the lowest since May 2008, when the number was also 39.1 percent. They hit a high of 56.7 percent last February.

But the market is still foreclosure-driven, said DataQuick's president, John Walsh.

"This market is still really lopsided," he said. "Foreclosures and short sales are huge factors. There's still not a lot of discretionary buying and selling outside the more affordable markets. Anybody who can sit tight is doing just that."

The market won't fully rebalance itself until financing becomes available for the higher price ranges, Walsh added.

Mortages over $417,000, the former definition of a "jumbo loan," accounted for 15 percent of all home purchase loans, roughly the same as it has been since June. Those loans made up nearly 40 percent of purchases before the August 2007 credit crunch hit, said DataQuick.

The other trend DataQuick noted is in the number of absentee and all-cash buyers _ speculators and investors. Absentee buyers bought 19.1 percent of all homes sold last month, while buyers who paid in cash accounted for 24.4 percent of sales, based on a DataQuick analysis of public records.