Southland home sales slow to ten-year low

November 14, 2006

La Jolla,CA----Last month was the slowest October for Southern California home sales in a decade. Prices continued to level off, a real estate information service reported.

A total of 22,117 new and resale homes sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was down 2.4 percent from 22,654 in September, and down 22.4 percent from 28,489 for October a year ago, according to DataQuick Information Systems.

Last month's sales count was the lowest for any October since 1996 when 18,505 homes were sold. October sales have ranged from 14,608 in 1991 to 32,522 in 2003. The October average is 23,077, slightly above last month's sales. DataQuick's sales statistics go back to 1988.

"It's harder to buy a home if you think it might go down in value than it is if you're convinced it's going up. Buyers are taking their time, trying to wait out the uncertainty in a market that is rebalancing itself. Additionally, many potential buyers are in the move-up category, and they have their own home they need to sell," said Marshall Prentice, DataQuick president.

The median price paid for a Southland home was $484,000 last month, the same as in September. The median was up 2.3 percent from $473,000 for October a year ago. Year-over-year increases have been in the single digits for seven months and are expected to be slightly negative by the end of the year or early next year.

DataQuick, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates, monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

The typical monthly mortgage payment that Southland buyers committed themselves to paying was $2,287 last month, down from $2,309 the previous month and up from $2,169 a year ago. Adjusted for inflation, current payments are 1.7 percent above typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 6.4 percent below the current cycle's June peak.

Indicators of market distress are still at a moderate level. Financing with adjustable-rate mortgages is flat. Foreclosure activity is rising but is still below average. Down payment sizes are stable, as are flipping rates and non-owner occupied buying activity, DataQuick reported.

Source: DQNews.com