DQNews: Southland home sales log tepid gain; record price drop

Southern California home sales experienced a weak, listless "bounce" in March, according to this April 15 story by DQNews, but nothing worth trumpeting. 12,808 new and existing homes were sold, up +18.8% for the month but -41.4% YOY. The seasonal history has been that on the average, sales rise +38% between February and March. This has been the lowest February-March bounce since DataQuick started tallying it in 1988.

Foreclosure sales were nearly 38% of all homes sold. In February 2007 foreclosures were about 8% of homes sold. Los Angeles County had the fewest foreclosure in its mix of homes sold, at 28.8%, while Riverside County had the highest number of foreclosures, at 56.4%. DataQuick comments that buyers and would-be sellers are opting to sit tight until they sense that the market has bottomed, so foreclosures are driving the bulk of sales. Since they are increasingly influencing the market, foreclosures drag prices down probably another 5 to 10%, though in recent months it's been more like 15%.

The median price for sold homes in the Southland was $385,000, -5.6% from February, -23.8% YOY, and down from $505,000, a peak reached last spring and summer.

Clearly, there has been a shift in what sells. Jumbo loan financing accounted for 15% of sales in March. In March 2007 it was 40%.

Very few industry experts were quoted in the article. Nobody even wants to venture a guess as to whether the bong hits doled out by the government (changes to conforming loan limits, FHA options) will help resuscitate this market.

The median monthly mortgage payment committed to in March was $1,816, down from $1,821 in March, and down from $2,326 in March 2007. It is -28.3% from the peak in June 2006. Adjusted for inflation, the monthly mortgage payment is actually -12.6% from spring 1989.

Indicators of stress continue to point in different directions. Non-owner occupied housing activity remains up (are these wannabe flippers?), flipping rates are stable, ARM financing is at a six year loan, foreclosures remain pegged at highs.

County         # sold  # sold   % chg    med       med      % chg
                 2007    2008            Mar 07    Mar 08
Los Angeles     8,353   4,263   -49.0%  $540,000  $440,000  -18.5%
Orange          3,130   1,663   -46.9%  $629,000  $506,000  -19.6%
Riverside       3,680   2,691   -26.9%  $420,000  $306,250  -27.1%
San Bernardino  2,476   1,534   -38.0%  $369,000  $265,000  -28.2%
San Diego       3,218   2,108   -34.5%  $490,000  $395,000  -19.4%
Ventura           999     549   -45.0%  $566,750  $430,000  -24.1%
SoCal          21,856  12,808   -41.4%  $505,000  $385,000  -23.8%