Southern California home sales rose last month for the first time in nearly three years, as steep discounts lured buyers back into a market where values have tumbled 31% over the last year.
Sales volume was up 13.8% overall from a year earlier, with Riverside County leading the way with a 48.6% jump, MDA DataQuick reported Monday. Los Angeles County was the exception, posting a 3.2% decline.
The rise is being driven in part by buyers like Andre and Jody Ocampo, who attended an auction of 250 foreclosed homes at the Riverside Convention Center on Sunday, looking for a bargain.
After just three minutes of bidding, they became buyers of a Lake Elsinore home -- offering $385,000 for a house that had been appraised just a couple of years ago at nearly $700,000.
The Ocampos said they weren't worried that prices would continue falling, as most real estate experts predict, because they plan to live in the home and not resell it for a quick profit.
"We've been building our nest egg and waiting for the right opportunity," Andre Ocampo said. "Our goal is to move in and make it our home, and wait out the market."
Overall, 20,329 homes in the six-county region closed escrow last month, MDA DataQuick said, for the first increase in Southland sales since September 2005.
G.U. Krueger, an economist with Irvine-based real estate advisory firm IHP Capital Partners, said the uptick was evidence that the "price mechanism is working" -- that is, lower prices are bringing buyers back into the market.
But he and other experts believe that prices will take months to hit bottom, citing the wave of foreclosures and the tightening of lending standards because of the continuing credit crunch.
"Higher sales are great, but foreclosures are still high and people need to appreciate that more discounts may be coming," Krueger said.
Los Angeles County, the one exception to the trend, hasn't been hit as hard by foreclosures and has relatively fewer discounted homes for sale. That's probably why it saw a slight decline in sales instead of the increase seen in neighboring counties, said John Karevoll, MDA DataQuick's chief analyst.
The median home price in Southern California last month fell 31.1% to $348,000 from $505,000 in July 2007, DataQuick said, the lowest level since February 2004, when the region was in the frenzy of the housing expansion. The decline ranged from 25.6% in San Diego County to 35.2% in San Bernardino County.
