Continued nose-dive for Southland home sales

January 15, 2008

La Jolla,CA----The remarkably low level of home sales in Southern California persisted last month as sellers, buyers and lending institutions continued to hold their collective breath amid market turmoil.

A total of 13,240 new and resale houses and condos were sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in December. That was up 0.5 percent from 13,173 for the previous month, and down 45.3 percent from 24,209 for December last year, according to DataQuick Information Systems.

Last month's sales were by far the lowest for any December in DataQuick's statistics, which go back to 1988. The sales count was 23.5 percent below the previous December low of 17,272 in 1990. The average December over the past 20 years is 25,543, the all-time peak for the month was reached in 2003 when 36,865 homes were sold.

"It looks like anybody who can, is waiting this thing out. Which of course means that the activity we are seeing right now is largely stressed and atypical. Today's numbers form a lousy basis for trending and forecasting. We're in the midst of turbulence and we won't know what really has been going on until things have settled down and we can look back," said Marshall Prentice, DataQuick president.

The median price paid for a Southland home was $425,000 last month, the lowest since $420,000 in February 2005. Last month's median was down 2.4 percent from November's $435,000, and 13.3 percent below $490,000 for December 2006.

Last month's median was 15.8 percent below the $505,000 peak reached last spring and summer. While the steep decline in median sales price does reflect a drop in prices, it also reflects significant shifts in the types of homes selling. Particularly noticeable is a drop-off in sales of more expensive homes financed with "jumbo" mortgages.

Since the credit crunch hit in August, these loans for over $417,000 have become more expensive and harder to obtain. Sales financed with jumbo loans represented about 22 percent of Southland transactions last month, down from nearly 40 percent before the credit crunch.

The median price paid for a home financed with a conforming loan was $386,250 in December, down 4.6 percent from $405,000 a year ago, and down 5.8 percent from the $410,000 peak reached in March and April of 2007.

DataQuick, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates, monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

The typical monthly mortgage payment that Southland buyers committed themselves to paying was $1,985 last month, down from $2,049 the previous month, and down from $2,242 a year ago. Adjusted for inflation, the current payment is 6.9 percent lower than the spring of 1989, the peak of the prior real estate cycle. It is 21.2 percent below the current cycle's peak in June 2006.

Indicators of market distress continue to move in different directions. Foreclosure activity is at record levels, financing with adjustable-rate mortgages or with multiple mortgages has dropped sharply. Down payment sizes and flipping rates are stable, non-owner occupied buying activity is edging up, DataQuick reported.

All Home Sales	No Sold Dec-06	No Sold Dec-07	Percent Change	Median Dec-06	Median Dec-07	Percent Change
Los Angeles	8,479	4,430	-47.8%	$525,000	$470,000	-10.5%
Orange	2,985	1,731	-42.0%	$630,000	$565,000	-10.3%
Riverside	4,542	2,503	-44.9%	$432,000	$355,000	-17.8%
San Bernardino	3,357	1,518	-54.8%	$370,000	$315,000	-14.9%
San Diego	3,823	2,468	-35.4%	$495,000	$430,000	-13.1%
Ventura	1,023	590	-42.3%	$590,000	$525,250	-11.0%
SoCal	24,209	13,240	-45.3%	$490,000	$425,000	-13.3%

Source: DQNews.com