So Cal Home Prices Drop to 18-Month Low

As if watching an old cartoon, inquiring minds are reading more bad news from The (Formerly) Golden State as new home prices slumped to an 18-month low. Bloomberg is reporting

Southern California home prices last month fell to the lowest level since 2009 and sales dropped 5.9 percent as high unemployment and tight credit curtailed demand, according to MDA DataQuick.

The median price paid in January for houses and condominiums in Los Angeles, Riverside, Ventura, San Diego, San Bernardino and Orange counties was $270,000, down from $271,500 a year earlier and the lowest level since July 2009, when it was $268,000. The median fell 6.9 percent from December, the San Diego-based data company said today in a statement.

“Lots of potential buyers continue to hold back, waiting for a sign prices have bottomed, that their jobs are safe, or that loans are easier to get,” John Walsh, MDA DataQuick’s president, said in the statement. “Sales were lousy, but many investors and others looking for bargains stayed active.”

There is statistical evidence of what Mr. Walsh said. At the end of December only 33% of homesellers were going to purchase another property. Nothing has happened to change that outlook in 30 days.

On top of this, a record number of people bought paying all-cash, showing that investors…and not families, are purchasing properties:

Sales in the region totaled 14,458 homes, down 5.9 percent from a year earlier and 26 percent from December. It was the lowest January tally in three years and the second-lowest since 1996, MDA DataQuick said.

About 30 percent of buyers appeared to pay all cash, an almost record proportion. Buyers in transactions where there was no corresponding loan paid a median $190,000, said the data provider, a unit of Richmond, British Columbia-based MacDonald, Dettwiler & Associates Ltd. The company compiles county records and supplies real estate data to public agencies, lenders and title companies.

Here comes the tidal wave.


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