Southern California Home Sales Slowest Since 1997

Southern California home sales remained at their slowest pace in nine years last month, as the market continued to rebalance itself after several years of heated activity. A total of 20,388 new and resale homes sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was down 7.8 percent from 22,117 in October, and down 26.2 percent from 27,637 for November a year ago. A decline from October to November is normal for the season. Last month’s sales count was the lowest for any November since 1997 when 18,305 homes were sold. Since 1988 November sales have ranged from 13,537 in 1991 to last year’s 27,637, the average for the month is 21,200. “Sales levels are still closer to the middle than to the peak or the bottom. As buyers and sellers, especially sellers, adjust their expectations to the new reality, we’re carefully watching what prices are doing. While it appears that they peaked last summer, we need to remember that summer buyers generally pay somewhat more for their homes than winter buyers. Additionally, different markets appear to have peaked at different times,” said Marshall Prentice, president of DataQuick, a real estate information service that provides housing statistics. The median price paid for a Southland home was $487,000 last month, up 0.6 percent from $484,000 in October and up 1.7 percent from $479,000 for November a year ago. The year-over-year increase was the lowest since February 1997 when the $160,000 median was up 1.3 percent from $158,000 a year earlier. The median peaked at $493,000 last June. Historically, summer buyers pay about three percent more for their homes than buyers in the November- to-February period. Homes in lower-cost neighborhoods appear to be appreciating more than five percent, while homes in move-up and prestige neighborhoods have flat or slightly declining prices. The typical monthly mortgage payment that Southland buyers committed themselves to paying was $2,265 last month, down from $2,287 the previous month and up from $2,238 a year ago. Adjusted for inflation, current payments are 1.5 percent above typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 6.6 percent below the current cycle’s June peak.