Home prices rise, sales decline in L.A. County
Home prices in Los Angeles County showed signs of life last month, rising 4.5% from a year ago to a median of $514,000, according to data released Monday.
That beat September’s 3% year-over-year price appreciation. It also was up from the previous month, reversing month-to-month declines in August and September, according to the latest report from DataQuick Information Systems.
Meanwhile, home sales in the state’s most populous county continued to fall, but at a slower pace. Sales of new and existing homes and condominiums fell 21.8% last month compared with October 2005, according to La Jolla-based DataQuick, an improvement from September’s 28% year-over-year drop.
The report provided some evidence that the region’s housing market may be stabilizing after several months of slowing. Buyers and sellers have been at a standoff, analysts say -- buyers waiting for lower prices, sellers holding out for maximum profit.
“People who thought they would get 15% to 20% off last year’s sale price are just throwing in the towel” and buying a house, said Patrick Veling, president of Real Data Strategies, a Brea firm that tracks multiple-listing data.
Veling had just come from a presentation at a local real estate office, where he heard reports of busy open houses over the weekend.
“That’s something I haven’t heard for awhile,” he said. “One said 40 people showed up -- that’s big.”
Economists have been keeping a close eye on the nation’s housing markets, watching for warning signs that the current slowdown is turning into a meltdown. A dramatic drop in the housing industry would send ripples throughout the economy, hurting homebuilders and related businesses from real estate firms to manufacturers of plumbing fixtures.
It could also spark a “reverse wealth effect,” making homeowners less financially confident and less willing to spend.
Slowing price appreciation is already having an effect on buyers who got adjustable rate mortgages or other risky financing arrangements to buy houses that may have been out of their price range.
As interest rates on these mortgages have reset, the number of Californians who have fallen behind on their monthly payments has grown sharply.
Although L.A. County home prices continue to notch year-over-year gains, their rate of growth slowed markedly this year after several years of double-digit increases.
DataQuick analyst John Karevoll cautioned that L.A. County’s rate of price appreciation could turn negative at the end of this year or early next year, as it has been for several months in San Diego County.
“We’ve had a doubling of prices in the past four and a half years,” Karevoll said. “It’s not the end of the world.
“It might be uncomfortable for those who bought at the peak if they have to sell, but for the vast majority of homeowners out there, this isn’t going to mean much.”
The median home price in L.A. County -- the point at which half of houses sell for more and half sell for less -- peaked in July at $520,000. It dipped the next two months, hitting $509,000 in September, before rebounding last month.
A clearer picture of regional housing trends could emerge today when DataQuick releases figures for other Southern California counties.
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Prices up, sales down
Los Angeles County median home prices and sales:
Prices
*--* Median Median price price Oct. ’05 Oct. ’06 Percentage (Thousands) (Thousands) change Resale houses $520.0 $540.0 +3.8 Resale condos 405.0 410.0 +1.2 New homes 450.0 507.5 +12.8 All combined 492.0 514.0 +4.5
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Sales
*--* Units Units sold sold Percentage Oct. ’05 Oct. ’06 change Resale houses 6,998 5,489 -21.6% Resale condos 1,774 1,336 -24.7 New homes 1,020 837 -17.9 All combined 9,792 7,662 -21.8
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Source: DataQuick Information Systems
