Average home prices in La Cañada Flintridge dipped in November for the third consecutive month, according to a real estate report released this week.
The average home price last month fell to $1.14 million last month from $1.32 million in October and was down 7.2% from the same period a year ago, according to Keller Williams Real Estate Services, a firm that tracks the real estate market in the Crescenta-Cañada and San Fernando Valley areas.
“[Home prices] have gone up and down a lot during the year, but if you compare it to last November, the average price per square foot dropped about 10%,” Keller Williams agent Keith Sorem said.
Local data was at odds with regional numbers also released this week that showed median home prices up last month in Southern California by 1.8% to $285,000.
Sorem attributed the dip in prices in La Cañada to a lack of competitive financing for jumbo loans of more than $729,750.
“To me, the big problem is the financing,” Sorem said. “The only people that can get a mortgage with a decent rate is someone who has a very high net worth, or a private lender or a bank that is going to keep the loan in their portfolio and would do it as a sort of perk to the customer.”
The $8,000-federal tax incentive helped drive sales in neighboring communities, Sorem said, but has had little effect in La Cañada where most homes are priced beyond the reach of individuals who would qualify for the credit.
Despite declining prices, sales activity in 2009 was up compared to last year, and inventory continued to shrink. Sam Buchanan, a partner at La Cañada-based B&B; Properties, said 171 properties sold in 2008 for a combined $234.5 million. This year, 211 properties sold for a combined $292.5 million.
There were 63 properties on the market last month in La Cañada, down from 72 in October.
Banks have become so skittish about extending loans, Buchanan said, that the financing process can drag on for months, even for buyers who are able to make a 20% down payment.
“Cash is king,” Buchanan said. “If someone can come in and pay cash for a property, then the owner is sure the deal will close.”
There are some buyers who are using the current market as an opportunity to upgrade their primary residence, or to buy investment properties, Buchanan said.
“I have a few clients who are . . . buying commercial property and residential property rather than invest money in the stock market because they see that this is the time to do that,” Buchanan said.
With interest rates expected to increase in March, Solem said, he does not anticipate any major improvements in La Cañada real estate prices next year.
“I think the market we have is going to be the market we are going to have for the next 14 to 16 months, barring any dramatic changes,” he said.