DQNews: Southland home sales post annual gain -- prices drop again

DQNews has published Southland home sales numbers for July. Sales are the highest in more than a year as falling Ginzu knife shoppers rushed out to scoop up "bargains." OK - not my words - but we're still in "Happy Days Are Here Again" bear market bounce mode which I expect to fizzle as the summer selling season wanes. 20,329 new and existing SFRs and condos were transacted in July, up YOY, though down -23% from the historical July average since DataQuick started tallying sales in 1988.

DataQuick acknowledges an ongoing "fire sale" of newer affordable properties. The firm says that we are not seeing such levels of distress in higher end homes, (If Mr. Mortgage's assessment is accurate, we could be seeing much higher levels of distress in higher end neighborhoods by the end of next year, as Alt-A and A level mortgage defaults kick in.)

The July Southland median home price is down -2.0% from June and down -31.1% YOY.

In June foreclosures were an upwardly revised 41.8% of all sales; in July foreclosures were 43.6% of all sales. Southland buyers committed themselves to a typical monthly payment of $1,632, down from $1,671 in June, and down from $2,447 YOY. Foreclosures remain pegged at record levels, ARM financing is at an all-time low, and non-owner occupied buying activity is flat to possibly "emerging", according to DataQuick.

County           Sales    Sales      %YOY      Median      Median      %YOY
                 July 07  July 08     Chg      July 07     July 08      Chg
Los Angeles      6,809    6,592      -3.2%     $547,500    $400,000   -26.90%
Orange           2,391    2,799      17.1%     $640,000    $461,000   -28.00%
Riverside        2,769    4,116      48.6%     $399,000    $260,000   -34.80%
San Bernardino   2,008    2,521      25.5%     $355,000    $230,000   -35.20%
San Diego        3,106    3,431      10.5%     $489,500    $364,000   -25.60%
Ventura            784      870      11.0%     $582,500    $420,000   -27.90%
SoCal           17,867   20,329      13.8%     $505,000    $348,000   -31.10%

Annette Haddad took over Los Angeles Times' DataQuick report for July. In her report dated August 19, she reports the rise in sales is driven in part by buyers attending auctions. One economist quoted in the article notes "the price mechanism is working." He issues the caveat that although higher sales are "great", there are many more foreclosures coming down the pipe and so more discounts "may be" coming.

Be sure to check out that L.A. Times article for stories of knife-shoppers, and then carefully read Mr. Mortgage's latest reports.