Southern California home sales held at a three-year low last month amid a sluggish move-up market and record-low sales of newly built homes. The median sale price fell year-over-year by the largest amount in 20 months as buyer uncertainty, tight credit and lackluster hiring continued to restrain housing demand, a real estate information service reported.
A total of 18,394 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in May. That was up insignificantly – 0.3 percent – from 18,344 in April, and down 17.4 percent from 22,270 in May 2010, according to San Diego-based DataQuick. May marked the 11th consecutive month in which sales fell year-over-year.
On average, sales between April and May have increased 5.7 percent since 1988, when DataQuick's statistics begin. May sales have varied from a low of 16,917 in 2008 to a high of 35,557 in 2005. Last month’s sales count was 29.0 percent below the May average of 25,902. May sales were lower than last month in just three of the past 23 years: 2008, 1995 and 1993.
The 1,152 newly built homes that sold across the Southland last month marked the lowest new-home total for the month of May since at least 1988.
“A year ago we were talking about sales reaching a four-year high as buyers rushed to take advantage of expiring federal homebuyer tax credits. Now sales are stuck at a three-year low. The government stimulus is long gone and some of the fundamental drivers of housing demand have yet to strengthen enough to lift sales to even average levels. Some of the key culprits are weak job growth, tight credit and a hesitancy among potential buyers and sellers, who question whether this is the best time to make their move,” said John Walsh, DataQuick president.
“So here we sit in the market doldrums,” he continued. “Two of the more likely sources of fresh wind in the market’s sails would be a pickup in hiring or further home price reductions.”
The median price paid for all new and resale Southland houses and condos purchased last month was $280,000, the same as in April but down 8.2 percent from $305,000 in May 2010. That year-over-year drop was the largest since the median fell 10.9 percent in September 2009. he typical monthly mortgage payment that Southland buyers committed themselves to paying was $1,154 last month, down 2.3 from $1,181 in April and down 10.8 percent from $1,293 in May 2010. Adjusted for inflation, current payments are 50.0 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 59.0 percent below the current cycle’s peak in July 2007. Indicators of market distress continue to move in different directions. Foreclosure activity remains high by historical standards but is lower than peak levels reached over the last two years. Financing with multiple mortgages is very low, and down payment sizes are stable, DataQuick reported.
| | Sales Volume | Median Price | ||||
| All homes | May-10 | May-11 | %Chng | May-10 | May-11 | %Chng |
| Los Angeles | 7,320 | 5,983 | -18.30% | $345,000 | $320,000 | -7.20% |
| Orange | 3,257 | 2,664 | -18.20% | $450,000 | $425,000 | -5.60% |
| Riverside | 4,164 | 3,644 | -12.50% | $210,000 | $197,000 | -6.20% |
| San Bernardino | 2,835 | 2,323 | -18.10% | $160,000 | $150,000 | -6.30% |
| San Diego | 3,879 | 3,087 | -20.40% | $340,000 | $324,500 | -4.60% |
| Ventura | 815 | 693 | -15.00% | $380,000 | $360,500 | -5.10% |
| SoCal | 22,270 | 18,394 | -17.40% | $305,000 | $280,000 | -8.20% |