Southern California Home Sales Sink in July

August 16, 2011 (Chris Moore)

New and existing home sales in Southern California fell to the lowest levels for a July in four years according to real estate information provider DataQuick as new home sales continued to decline to record low levels.

Sales in the Southern California region, which includes Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties, totaled 18,090 new and re-sale homes in July. That was down 11.9 percent from the 20,532 homes sold in June and 4.5 percent below July’s historical average of 18,946 sold homes. Sales typically fall 4.8 percent from June to July.

A total of 1,022 new homes were sold across the six counties last month, down from 1,395 sold the previous month and a 7.3 percent drop from July of last year. It was the lowest amount of new home sales for the month of July since DataQuick started keeping records in 1988.

"The latest sales figures look a bit worse than they really are, given this July was a fairly short month, but they still suggest some potential homebuyers got spooked. Reports on the economy became increasingly downbeat and, no doubt, some people fretted over the possibility the country would default on its obligations," said John Walsh, DataQuick president. "If there's a shred of good news in the data it's that last month's sales weren't much worse than a year earlier. For the first time in many months, we get an apples-to-apples comparison to year-ago sales, given that in July 2010 the market lost its crutch -- federal homebuyer tax credits."

Sales of homes priced above $800,000 declined 20.5 percent from June, while sales of homes priced in the $300,000 to $800,000 range declined 13.3 percent and sales of homes priced below $200,000 declined 11.2 percent.

The median price for homes in the region decreased slightly from the previous month. The median price paid for all new and re-sale homes in the Southern California region in July was $283,000, which was down from $285,000 last month. The median price was also down 4.1 percent from $295,000 in July of 2010. The median price for a home in the area at the current housing cycle’s peak in mid-2007 was $505,000.

Distressed properties accounted for about half of the re-sale market in July with approximately one in three re-sale homes being a foreclosure, and about one in five being a short sale.

Foreclosures re-sales made up 32.5 percent of the market in July while short sales made up an estimated 17.3 percent of re-sales.

Investors continued to play a significant role in the market as absentee buyers who paid cash purchased 23.8 percent of the homes sold in the area in July. Total cash purchases accounted for 28.2 percent of the homes sold for the month. Absentee buyers paid a median price of $212,000 for the homes they purchased, while cash buyers paid a median price of $214,000 for the homes they purchased in July.

Tags: DataQuick, new homes, re-sale homes, median price, home sales, investors, absentee buyers, tight credit, weak job growth

Source:
DataQuick