Home prices fell in most Southern California neighborhoods and the number of sales tumbled to a 15-year low for August -- driven down by tougher lending standards, mounting foreclosures and skittish buyers.
Sales for the month plunged 36% from a year earlier. What's more, 71% of the Southland's ZIP Codes showed price declines, according to figures released Wednesday by DataQuick Information Systems. The survey excluded areas with 14 or fewer sales.
For The Record
Los Angeles Times Tuesday, September 18, 2007 Home Edition Main News Part A Page 2 National Desk 1 inches; 57 words Type of Material: Correction
Home prices: A map in Thursday's Section A accompanying a story on home price changes in Southern California incorrectly labeled a Los Angeles ZIP Code. The dot labeled as ZIP Code 90039, and its corresponding information, should have been ZIP Code 90056, with a median price in August of $1,337,500, a 42.7% increase from a year earlier.
"Prices are falling everywhere," said Christopher Thornberg, a former UCLA business professor who is now a principal at Los Angeles-based Beacon Economics.
In recent years, the housing market had been propped up by the widespread use of home loans with low introductory teaser rates -- allowing prices to outpace income growth, he said. But with those easy-credit loans all but gone, values are coming back into balance.
"People just don't have the income to support these prices except with crazy mortgages -- and now the mortgage money is going away, and people are walking away from their homes," Thornberg said.
Nearly 9% of the homes sold last month were foreclosure properties, DataQuick reported, up from 2.2% a year earlier.
Most communities are seeing price declines, and the downtrend is strongest in outlying suburban areas such as in Riverside County, where affordable homes attracted droves of first-time buyers -- many of whom could not qualify for traditional fixed-rated mortgages.
Today, many of these same buyers who counted on rising home values can't refinance their loans and can't make the escalating payments on their adjustable-rate mortgages, forcing them into foreclosure and putting yet more properties on the market.
"Virtually every community in Riverside County has massive inventory levels, which almost certainly will require price corrections in order to be absorbed," Riverside County-based appraiser Michael Mathis said.
Riverside County posted the worst showing of the six Southland counties in the DataQuick report, with the median home price there falling 6.1% and sales volume down 46.4% compared with August 2006.
Surprisingly, the median price of a home in Southern California rose last month to $500,000 -- up 2.7% over August 2006. In Los Angeles County, the median price rose 5.8% to $550,000, although sales sank 34.4%.
