O.C. home prices decline
Orange County last month posted its first year-over-year decline in median home price in more than a decade, another sign of the widening reach of Southern California’s housing slowdown, data released Wednesday showed.
Orange County’s 0.4% drop put it alongside San Diego and Ventura counties in recording price declines, while Riverside County managed no price gain for the first time in a decade, according to DataQuick Information Systems, a La Jolla-based research firm.
However, the median price for all six Southland counties still rose to another record, thanks to gains in Los Angeles and San Bernardino counties.
“February’s record Southland median is another indication the housing market, although certainly weaker than last year, is hardly down for the count, as some would suggest,” DataQuick President Marshall Prentice said.
The decline in Orange County’s median was not unexpected. Since October, the median price of resale homes -- the largest housing segment there -- had been declining, DataQuick analyst Andrew LePage said. The overall median stayed positive because of price growth in new homes.
“What’s surprising is how long it took Orange County’s all-home median to go negative,” he said. “It was only a matter of time.”
The year-over-year decline in Orange County, the region’s most expensive home market, was its first since November 1996, according to DataQuick. The median fell to $620,000 as sales dropped 16.4%.
And February was the first month since April 1997 that Riverside County posted no price gain. Its median stayed at $410,000 as sales plunged 36.3%.
The median price for all types of homes sold in the six-county region reached $495,000, up 2.1% from January and up 5.3% from a year earlier. It was the biggest year-over-year gain since July but far from the 12% increase of February 2006.
Sales, however, fell to a decade low, with only 17,680 home sales recorded, a 19.8% drop from a year earlier and the fewest for any February since 1997.
The region’s housing market is expected to become even more sluggish over the next few months, industry analysts and economists said. That’s because lenders have begun toughening their rules for approving mortgages, especially for borrowers with weak credit scores and inconsistent incomes.
This burgeoning credit crunch is expected to keep many would-be buyers in Southern California and elsewhere on the sidelines. Many homeowners with onerous mortgage payments may be forced to sell or face foreclosure if they can’t refinance.
Also helping to explain the slowdown in sales: a drop in borrowers’ use of adjustable-rate mortgages -- usually the first choice of those stretching to afford a home. In February, adjustable-rate loans represented 61% of all loans to purchase a home, compared with 74% a year earlier, DataQuick said.
With February kicking off the official spring selling season, experts are waiting to see how fast the inventory of unsold homes grows amid stalling demand. So far this year, the region’s inventory levels, though 30% to 40% higher than a year earlier, have not ballooned on a month-to-month basis.
In February, inventory of existing homes in Orange, Riverside and San Diego counties rose no more than 3% from the previous month, according to ZipRealty Inc., a real estate brokerage firm in Emeryville, Calif.
The higher year-over-year inventory is “putting pressure on other people not to put their homes on the market because they see other homes for sale on their same block,” said Patrick Lashinsky, ZipRealty’s president.
“The people who have to sell are selling, but others are being more cautious,” he added.
More listings coming on the market now appear to be priced at market rate or below, Lashinsky said. About 30% of sellers have reduced their prices as of March 2, according to ZipRealty data. That was an improvement over early November, when 40% of listings had price reductions.
Last month, San Diego County’s median price fell 5.9% to $480,000 as sales dropped 5.7%, DataQuick said. San Diego’s home prices have been declining for almost a year. It was the first Southern California region to see a boom in prices seven years ago and was the first to start trailing off.
The median in San Bernardino County rose 2.1% to $368,750 as sales dropped 31.4%. Ventura County, the region’s smallest market, saw its median fall 3.5% to $584,000 as sales declined 16.4%.
Los Angeles County’s median rose 7.8% to a record $528,000 as sales decreased 11.1%, according to data released Monday by DataQuick.
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February sales
Median price and number of new and previously owned homes sold in February, by county and overall in Southern California
*--* % change Median % change Number of from price from Area homes sold year ago (thousands) year ago Riverside 3,057 -36.3% $410 0% San Bernardino 2,274 -31.4 369 +2.1 Orange 2,449 -16.4 620 -0.4 Ventura 737 -16.4 584 -3.5 Los Angeles 6,300 -11.1 528 +7.8 San Diego 2,863 -5.7 480 -5.9 Southern California 17,680 -19.8 495 +5.3
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Source: DataQuick Information Systems
