Regional home prices grow at sluggish pace
Southern California home prices rose in November at their most sluggish pace in nearly a decade while sales remained lackluster, data released Wednesday showed.
Helping to drag down the region was San Diego County, where prices took their biggest year-over-year plunge on record, and Orange County, where prices were unchanged.
San Diego County median prices fell 6.9% in November, the sixth straight monthly decline, said La Jolla-based DataQuick Information Systems. Home values in the county were the first to experience double-digit gains during the recent housing boom and the first to soften.
Prices in Orange County failed to rise compared with year-earlier levels for the first time since 1997. The overall median, which includes new and resale units, was $616,000, unchanged from November 2005 and the lowest since February. For existing homes, Orange County’s median dropped 1.5% to $660,000. Sales fell 29.3% from a year earlier.
Regionwide, the median price of all homes sold last month was $487,000, up 0.6% from October and 1.7% higher than November 2005, DataQuick said. It was the smallest year-over-year increase since February 1997.
The 20,388 homes sold regionwide was the fewest for any November since 1997, and was off 7.8% from October and 26.2% lower than the year-earlier month, DataQuick said.
November tends to be one of the slowest periods for real estate activity. But last month’s numbers further confirmed that the Southland continues to settle down after its dramatic run-up between 2000 and 2005, when home values doubled.
San Diego County’s year-over-year price declines are expected to occur elsewhere in Southern California over the next six months. Experts contend that decelerating prices and sales are not necessarily a prelude to a crash but are prerequisites for the market to reestablish its footing after a period of extraordinary growth.
“Obviously, there’s a correction going on,” said Delores Conway, director of the Casden Real Estate Economics Forecast at USC. “Even with prices flattening, it doesn’t mean that we’re in a serious housing downturn.”
One sign of a market shift has been the rise in the number of existing homes for sale. Over the last year, inventory in Los Angeles and Orange counties nearly doubled, according to ZipRealty Inc., a nationwide real estate brokerage based in Emeryville, Calif.
That has given buyers more options, resulting in a “correction” in prices. According to ZipRealty, about 40% of sellers in Los Angeles and Orange counties have reduced their prices at least once since September.
When home values were appreciating, “buyers were pricing in future gains, so it didn’t matter what they paid,” said Rich Toscano, a San Diego-based financial advisor who studies the region’s housing market.
“Buyers are coming around to the idea that prices can and will decline and are now factoring that into their calculations,” Toscano said.
In San Diego, the 6.9% drop in the median price for all homes masked the 13.8% plunge in the median price of new homes and condominiums, DataQuick said. Prices for existing single-family homes fell only 4.4%.
The median price in Ventura County, the smallest in the region in terms of housing activity, fell for the third straight month, declining 8.2% year over year to $562,000 as sales slid 30.8%.
Retaining some vigor was the Inland Empire, where values hit records. In Riverside County, the median price rose 5.2% to $426,000, a new high. But sales slumped 35.7% from a year ago. San Bernardino County’s median rose 8.6% to a record $380,000 as sales declined 26.7%.
As reported Tuesday, Los Angeles County’s median rose 2.6% to $510,000, thanks to still-hot neighborhoods that are considered affordable. Sales fell 18.9%.
The median price is the point at which half of all homes sold for more, half for less.
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A slow month
Median price and number of new and previously owned homes sold
in November, by county and overall in Southern California
*--* % change Median % change Number of from price from County homes sold year ago ($1000) year ago San Bernardino 2,926 -26.7% $380 +8.6% Riverside 3,794 -35.7 426 +5.2 Los Angeles 7,351 -18.9 510 +2.6 Orange 2,475 -29.3 616 0.0 San Diego 2,987 -24.1 482 -6.9 Ventura 855 -30.8 562 -8.2 Southern California 20,388 -26.2 487 +1.7
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Source: DataQuick Information Systems
