Housing Price Slowdown Continues
Southern California home prices hit new highs in July for the sixth consecutive month, although signs of a real estate slowdown continued to grow, data released Monday showed.
The median price in the six-county region reached $469,000 last month, according to DataQuick Information Systems, a La Jolla-based company that tracks real estate prices. Although that was a 16.7% increase on a year-over-year basis, price growth has been hovering near that pace since the spring -- after exceeding 20% nearly every month last year.
Price gains in Riverside and San Bernardino counties, the region’s two hottest markets, slowed for the first time in about a year. San Diego County’s increases continued to decelerate, while sales there dropped nearly 16%, the region’s biggest dip.
Sales overall in the Southland fell 5.8% versus the year-ago period, according to DataQuick. Still, more than 31,000 homes were sold last month, the fourth-highest total for a July since 1988.
The latest DataQuick numbers intensified the debate over whether the region’s housing market was merely easing to more normal growth or setting up for a deeper decline. The region’s cooling trend is also evident in a rising supply of homes for sale, and lengthier durations needed to sell a home.
“We’re just sitting here with bated breath watching the numbers coming in to try to figure out what’s going on,” said John Karevoll, DataQuick’s chief analyst.
But, Karevoll said, the latest data do not suggest anything out of the ordinary: “This is what you would expect to see in a normal real estate cycle.”
However, some real estate agents report sharper slowdowns.
Huntington Beach agent Mike Stankewich said home prices in his territory -- particularly those priced above $800,000 -- actually declined week over week, by around 5%, in July compared with the previous month. Plus, homes were sitting longer -- in some cases for 60 days or more -- without receiving any offers, he said.
“Prices are just getting beyond the reach of potential buyers, especially in the higher-end market,” Stankewich said. “Many sellers still think prices will continue to go up, but buyers believe prices should be declining by now.”
Data released Monday by the National Assn. of Realtors showed other U.S. markets, including Las Vegas, also experiencing price slowdown. But some locales, such as Phoenix, continued to enjoy annualized price surges as high as 47% in the second quarter.
San Diego County is undergoing the Southland’s most dramatic price slowdown. It posted a record median price in July of $496,000, just a 5.1% boost compared with gains of nearly 30% in mid-2004. The median is the price at which half of all homes sold for more, half for less.
“Prices there are crossing the threshold at a much slower pace, but they’re still crossing,” Karevoll said.
San Bernardino County’s median price rose to $328,000, but its 27.6% price growth was the first under 30% in 11 months, Karevoll said. Riverside County saw its price growth dip below 20% for the first time in about a year. The median price there rose 17.7% to $385,000 in July. Sales fell 5.8% in San Bernardino and 3.5% in Riverside.
In Orange County, the median price rose 14.5% to $601,000. But that was down 0.3% from June’s median of $603,000, an all-time record. Sales rose 3.5%.
Los Angeles County’s price appreciation regained some steam after dipping below 20% this spring. The median rose 20.2% to a record $488,000, DataQuick said. Sales fell 7.3%.
Ventura County’s median rose 15.3% to $579,000, although that was below the area’s record of $584,000 set in June. Meanwhile, sales rose 9.8%.
The Southern California housing market, Karevoll said, “is like a train that is following the same track, with some cars closer to the front and some to the back. Yet the individual cars are moving at different speeds.”
Some experts blame the slowdown on reduced affordability and rising mortgage rates. Long-term mortgage rates, although lower than a decade ago, have ticked up in recent weeks and are expected to continue rising.
But these factors, along with the growing number of homes for sale, don’t suggest a crash, said Patrick Veling, president of Brea-based consulting firm RealData Strategies.
“While we have more inventory, this is certainly no substantial reversal in the market,” Veling said. “There has been a healthy reduction in demand, but demand is still outpacing supply.”
Veling, whose company collects and analyzes data from property listing services, predicts Southland home prices will rise between 6% and 12% this year, depending on location and price range.
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Cooling trend
Median home price in July for new and resold homes overall and by county
*--* Median % change price from Area (thousands) year ago San Bernardino $328 +27.6% Los Angeles 488 +20.2 Riverside 385 +17.7 Ventura 579 +15.3 Orange 601 +14.5 San Diego 496 +5.1 S. California 469 +16.7
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Source: DataQuick Information Systems
