Home prices remain steady
Southern California housing prices held steady in January while sales declines slowed, according to data released Wednesday, prompting some experts to suggest that the local real estate downturn may be nearing a bottom.
The region’s median home price last month of $485,000 was in line with the monthly median for the last seven months, and up 5% from a year earlier, according to La Jolla-based research firm DataQuick Information Systems.
Meanwhile, the sales decline of 17% from a year earlier was the smallest since May. And although the 18,121 transactions amounted to the worst January since 1998, the volume was about average for the last two decades, DataQuick statistics showed.
“The market is showing much more resilience than we or anybody thought,” said John Karevoll, DataQuick’s chief analyst. Last year, Karevoll and others forecast that Southland home prices would be lower than year-earlier levels by the start of 2007.
Torrance homeowner Brent Kaneshiro also has been surprised by the market’s strength. Late last year, he began looking for a bigger house and thought he could make an offer before selling his existing home.
But Kaneshiro soon found out that sellers were reluctant to accept contingent offers -- a sign of market strength because desperate sellers would be more willing to accommodate buyers. So he had to rearrange his plans, selling his house first before continuing his home quest.
“Once I was in escrow I was able to make offers,” Kaneshiro said. He and his wife closed escrow on their new home in January.
To be sure, home-price appreciation has cooled down considerably throughout the six-county Southland, and two counties have experienced median price declines. San Diego’s median fell for the seventh month in a row, slipping 5.6% year over year to $472,000, and Ventura’s median edged down 6.5% to $565,000, the fifth consecutive drop, DataQuick said.
Many analysts expect values elsewhere in the Southland to follow suit.
Last month, Orange County came closer to a price decline. Its median price was flat with the year-earlier period at $600,000 but was 4.7% lower than December’s median of $630,000. Sales in Orange County fell 16.3%.
But since mid-2006, median prices regionwide have leveled off and the supply of homes for sale has thinned.
“We may have bottomed out and are on the way up,” said G.U. Krueger, an economist for real estate advisory firm IHP Capital Partners in Irvine. “At least for now.”
That’s good news for Southern California’s economy and for residents who already own homes, particularly those who stretched themselves financially to make a purchase, he said.
“They aren’t having the kind of equity erosion that some predicted,” Krueger said. “If the price trend can be controlled, then the impact of foreclosure activity will not be as bad.”
So far this year, a smaller-than-expected number of existing homes have come up for sale.
“We started the year in a buyers’ market, which has quickly evolved into a slight sellers’ market,” Steven Thomas, president of Re/Max Real Estate Services of Orange County, wrote to his troops last week.
In Orange County, between Jan. 2 and Tuesday, only 290 new homes were listed for sale, Thomas said.
“I thought we would be seeing a ton of properties hit by now, but there’s definitely been a pause,” he said in an interview. “Inventory is not increasing at the rate I had anticipated.”
Plus, demand accelerated within the last 30 days, based on the number of homes that went into escrow, Thomas said. Between early January and early February, about 2,500 Orange County homes opened escrow, or 500 more than the prior period.
What’s more, the average time needed to sell a home in Orange County has ratcheted down from six months in January to 4.8 months in early February, he said.
Some of the uptick in activity is to be expected, because February is the traditional kickoff to the spring home-selling season. Already this year, several new-home builders -- a group that has been especially hard-hit by the recent slowdown -- have reported stronger sales.
But whether the upturn has legs remains to be seen.
“This could be the calm before the storm,” Thomas said.
Last month, Los Angeles County continued to show the most strength of any local county. Its median price rose 6.1% above a year ago to $520,000, and was down just 0.9% from December’s median. Sales slipped 6.9%.
Homes in the Inland Empire logged year-over-year price gains as well, but at a much slower sales rate.
The median price in Riverside County rose 1.2% to $415,000, while sales plunged 34.2%. San Bernardino County’s median rose 4.2% to $370,000, and sales dropped 28.5%.
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January sales
Median price and number of new and previously owned homes sold
in January, by county and overall in Southern California
*--* % change Median % change Number of from price from Area homes sold year ago (thousands) year ago Riverside 3,089 -34.2% $415 +1.2% San Bernardino 2,373 -28.5 370 +4.2 Orange 2,400 -16.3 600 0 Ventura 689 -14.3 565 -6.5 Los Angeles 6,805 -6.9 520 +6.1 San Diego 2,772 -4.3 472 -5.6 Southern California 18,128 -17.2 485 +5.0
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Source: DataQuick Information Systems
