Southern California Home Sales Plummet

(LoanRateUpdate)

Southern California home sales plummeted almost 13 percent in December from a year earlier as unemployment and tight credit cut demand, according to San Diego-based data firm DataQuick. The data was somewhat of a surprise as the Southern California market had recently been showing signs of stability and market improvement.

There were 19,528 homes sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties, the lowest December tally in three years and the second- lowest since 1995, DataQuick said. Sales fell from 22,328 a year earlier.

The median price was $290,000, up 0.3 percent from a year earlier and 1 percent from November. The gain from December 2009 was the smallest increase since prices began to rise a year ago.

“What happens next will hinge largely on the pace of the economic recovery and the manner in which lenders manage their inventories of distressed properties, which are competition for new homes,” John Walsh, MDA DataQuick’s president, said in the statement. “A loosening of credit terms would help an awful lot, too, especially in move-up markets.”

Foreclosure resales accounted for 34.3% of the resale market in December, down from 35.2% in November and down from 29.6% one year ago. Foreclosure resales hit a low this year of 32.8% in June and had generally trended slightly higher until last month. The peak was in February 2009 at 56.7%, DataQuick reported.

All six counties showed sales drops from a year earlier, led by a 15 percent decline in Ventura.

Median sale price fell on a year-over-year basis in four of the six counties, with Los Angeles down 2.7%, Orange down 5.7%, San Bernardino down 1.3% and Ventura down 1.4%, while San Diego and Riverside counties recorded small gains of 0.9 % and 2%, respectively.

With regard to upcoming home-buying activity in the area, Walsh said there's "potential for sales to perk up this spring if rates stay low and brighter economic news lifts consumer confidence."

Tags: southern california, home sales, unemployment, tight credit, dataquick, median home price, mortgage lenders, distressed properties, foreclosures