Home Sales Continue to Decline
Sales of homes in Southern California declined for the fourth month in a row in March as the median home price in the six-county region crossed the half-million-dollar mark for the first time, according to data released Tuesday.
The median price paid for a home in Los Angeles, Orange, Riverside, San Diego, Ventura and San Diego counties rose 14%, to a record $501,000, from a year earlier and was up 4.4% from February, La Jolla-based research firm DataQuick Information Systems reported. The median is the point at which half of all houses, condominiums and town homes sold for more and half sold for less.
The number of homes changing hands in the region fell 9.7% on a year-over-year basis to 29,905. It was the fourth consecutive month that sales volume fell, further evidence that the region’s once-robust housing market has shifted into lower gear.
Sales activity and price increases reached a peak about two years ago. Both have been ticking down on a year-over-year basis since. Experts call that a return to more typical market conditions.
“Basically, a normal real estate cycle is what it’s looking like right now,” said John Karevoll, chief analyst for DataQuick.
Still, Karevoll and others contend that current price increases cannot be sustained. They predict that the rate of appreciation could be in the mid-single digits to zero by year’s end.
“Anytime you see a volume drop, the price will be impacted two to three months from now,” said Michael Davin, executive vice president of Catalist Homes, a Hermosa Beach-based real estate brokerage that serves the region.
“Supply will be key to where this market heads,” Davin added. “Inventory is going up but not at any alarming levels.”
About 50% more homes are on the market than a year ago, and they are typically taking longer to sell -- from an average of 27 days a year ago to about 48 today.
But “homes priced right” are being snapped up, even as mortgage rates have ticked higher, he said.
Not surprisingly, the biggest annual percentage increase in March occurred in San Bernardino County, where the median-priced home rose 23.2% to $367,000, the lowest in the region. The priciest county, Orange, saw its median rise 10.3% to $623,000, a record. Orange County sales plunged 22.3%, the biggest drop of any Southland county.
The median in San Diego, which has been viewed as a barometer of market trends because it was the first county to accelerate and the first to slow, rose 5.7% to $504,000 although sales fell 17.4%. Prices there have declined 2% in the last six months.
Riverside was the only county to record an increase in sales, which rose 6% as the median gained 9% to a record $413,000. L.A.’s median rose 15% to $506,000, also a record, but sales fell 10.3%.
In Ventura County, the median rose 14% to $610,000 while sales declined 16.9%.
Ever-rising prices are keeping more and more potential buyers out of the market, Karevoll said. But even with waning demand, sales levels would have to fall at a greater rate for prices to decline as well.
March’s sales volume, he said, was well above the average of the last 18 years, he said. “For the market to turn down right now,” he said, “we would have to see significantly lower sales level.”
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*--* % change Median % change Number of from price from Area homes sold year ago (thousands) year ago San Bernardino 4,182 -3.4% $367 +23.2% Los Angeles 9,755 -10.3 506 +15.0 Ventura 1,249 -16.9 610 +14.0 Orange 3,910 -22.3 623 +10.3 Riverside 6,267 +6.0 413 +9.0 San Diego 4,146 -17.4 504 +5.7 Southern California 29,509 -9.7 501 +14.1
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Source: DataQuick Information Systems
