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Home Sales Slowing in Southland

The region posts a 20.4% year-over-year increase in prices in August, but only Riverside and San Bernardino show gains in the number sold.

September 16, 2004|Annette Haddad | Times Staff Writer

Led by strong gains in the Inland Empire, the median price of a Southern California home hit a record $407,000 in August, a 20.4% increase from a year earlier, DataQuick Information Systems reported Wednesday.

Riverside and San Bernardino counties were the only ones in the region to post year-over-year sales gains (4.6% and 6.2%, respectively), and the median price -- the point at which half sold for more, half for less -- set records in both counties. Riverside's median sales price jumped 28.5% to $334,000; San Bernardino's, 26.1% to $261,000.

But signs of a cooling trend, both in the numbers and in the market, were abundant.

For starters, August's price run-up was the smallest this year. Sales across the region fell to 31,131, a 9.6% drop from a year earlier and a 5.6% decline from July.

And a rising tide of homes on the market, coupled with higher prices, is starting to damp activity in the region's hottest market.

A telling sign can be found on the wall at Century 21 King Realtors in Chino.

Three bulletin boards track the office's listings: two for homes in escrow, one for properties for sale. In the last few days, however, the balance has shifted.

For the first time in more than a year, King has more listings than escrows, agent Sherry Young said.

"Some houses are going three or four weeks and not one offer," Young said. That's in contrast with the spring, when nearly every new listing was quickly greeted by multiple offers.

"Prices have hit a ceiling," Young said. "Buyers are saying 'Wait a minute' before they take the next step."

For the rest of the Southland, Orange County saw the biggest drop in sales last month -- by 32% to 3,745, the weakest August in eight years. Still, the county's median price rose 25% from a year ago, to $543,000, equaling a record set in May. During June and July, the median fell to $540,000 and $525,000, respectively.

Orange County's median price was probably helped by interest rates dropping this summer after rising in the spring, said economist Esmael Adibi of the A. Gary Anderson Center for Economic Research at Chapman University.

Still, he's sticking with his prediction that home prices in Orange County will moderate this year and decline by 5% or more in 2005.

"Something you can't measure is people's psychology," he said. "If people feel that prices are going to go down there could be a herd mentality and everybody will feel they have to list now."

With the supply expanding, Adibi said, "demand softens and both home sales activity and prices have to decline."

In Ventura County, sales fell 31% from a year ago, to 1,198, and were off from 1,281 in July. The median price climbed to $514,000, compared with $502,000 in July and $404,000 a year ago.

In San Diego County, sales skidded 5.7% from a year earlier, to 5,919, but the median price surged 24.2% to $483,000.

In Los Angeles County, the median price was $407,000 in August, up 20.4% year over year.

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(BEGIN TEXT OF INFOBOX)

Home sales and prices

Sales and median price of new and resold homes

*--* % Median % Homes change price change sold from Aug. '04 from County Aug. '04 Aug. '03 (000s) Aug. '03 Riverside 5,579 +4.6% $334 +28.5% Ventura 1,198 -31.0 514 +27.2 San Bernardino 4,319 +6.2 261 +26.1 Orange 3,745 -32.0 543 +24.8 San Diego 5,580 -5.7 483 +24.2 Los Angeles 10,710 -9.8 407 +20.4 So. California 31,131 -9.6 407 +20.4

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Source: DataQuick Information Systems

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