Falling Prices Fail to Spur July Home Sales

Despite lower prices and record low mortgage rates, Southern California home sales continued to decline in July, according to a Southland real estate newsletter.

A total of 15,154 homes were sold in Los Angeles, Ventura, Orange, Riverside, San Bernardino and San Diego counties last month. That was 7.2% fewer than June’s 16,335 and down 17.7% from 18,420 in July, 1991, the Southern California Real Estate Observer reported.

The median price of a single-family resale residence was $183,000 in July. That was down 1.6% from June’s $186,000 and down 6.2% from $195,000 in July a year ago.

“What’s particularly disturbing about this month’s numbers is that prices actually are coming down,” said John Karevoll, editor of the newsletter. “Most previous declines could be attributed to shifts in market mix. This time around, asking prices are being cut so far that some people are actually selling their homes for less than they bought them for a few years back.”

Of the 271 areas the Real Estate Observer monitors in its price survey, 216 saw year-over-year price declines. Sun City, Fallbrook, Pacific Palisades and the San Diego neighborhood of Kensington, all saw prices fall by roughly 20%.

The number of homes sold is down in 168 of the 271 areas. Hardest hit is Lake Forest, La Habra, San Pedro and Beverly Hills, which all saw declines in sales volume of roughly 40%, according to the newsletter.

In South-Central Los Angeles, parts of which were hit hard by May’s riots, sales were off by 36% compared to year-ago levels. However, average prices increased 5.1% from $136,000 a year ago to $143,000 last month.