Southern California housing market still under siege

Southern California’s housing market took another beating last month as median prices fell an average of 27% from a year ago – the sharpest drop in at least 20 years. The median home sale price in six Southern California counties was $370,000, down from $505,000 a year earlier, according to DataQuick Information Systems. DataQuick said that was the biggest annual decline it has recorded since it began tracking prices in 1988.

The last time the median was lower was in March 2004, when it was $364,000.

The dramatic price drop was attributed largely to sluggish high-end sales, more sellers dropping their asking prices and lenders selling off more of their aggressively priced, repossessed homes, according to real estate data provider DataQuick Information Systems.

People shopping for homes are also doing their best to beat down prices, even if it means delaying the purchase of homes they truly want, agents said.

“Buyers are being very aggressive in the offers they are writing,” said Lynette Williams of Re/Max in Pasadena. “They are hearing about foreclosures, hearing prices are dropping and feeling that if they wait long enough the seller is going to come down in price.”

The median is a statistical midpoint – half the homes sold for more, and half for less. May’s median price was down 3.9% from April, when it was $385,000.

A total of 16,917 new and resale houses and condos closed escrow in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in May. That was up 8.3% from April but down almost 15% from May last year.

Athough last month’s sales total was the highest for any month since August 2007, when 17,755 homes sold, it was still the lowest for a May in DataQuick’s statistics, which go back to 1988. Last month was also 36.5% lower than the May average of 26,637 sales.

Sales of post-foreclosure homes continue to dominate many inland markets. Of all the Southland homes resold in May, 37.4% had been foreclosed on at some point in the prior 12 months, compared with a revised 36.2% in April and 5.5% one year ago. Across the six-county area, these “foreclosure resales” ranged from 25.6% of resale activity in Orange County to 56.6% in Riverside County.

Relatively affordable areas with high levels of foreclosure resales and steep price drops were the most likely to post year-over-year increases in sales.

Nearly two-thirds of the Southland ZIP Codes that saw annual sales gains in May had a median sale price below $400,000, and about half of their combined sales were foreclosure resales, according to an analysis of single-family house resale transactions. On average, these ZIPs saw their median price fall 27% from a year ago and 38% from their peaks.

“What horsepower this market can generate right now is mainly fueled by bargain shopping, especially by first-time buyers and investors in inland areas,” said Andrew LePage, an analyst for DataQuick. “Meanwhile, sales remain especially slow in most higher-end markets, with jumbo mortgages (over $417,000) making up only a slightly higher percentage of all purchase loans in May than in April. That doesn’t bode well for the high end, where so far prices have come off their peaks but have generally held up best.”

 roger.vincent@latimes.com