Southern California home values keep spiraling down, but sales volume is picking up in the Inland Empire and other areas where bargain hunters are snapping up foreclosed properties at steep discounts.
Home prices plunged 29.3% last month from a year earlier, to a median of $355,000 in six Southern California counties, a real estate information service reported Wednesday. That's about where prices were in 2004.
The number of homes sold in June was down 13.6% from a year earlier. But Riverside County posted an 11.8% jump in sales, thanks to repossessed homes being sold at fire-sale prices, according to DataQuick Information Systems.
Low prices are luring both first-time buyers and full-time real estate investors such as Kurtis and Cindy Squyres of La Quinta.
The couple have been buying two to four houses a month, most of them foreclosures in the Coachella Valley and Inland Empire. They look for the cheapest properties they can find, aiming to buy and quickly resell for a modest profit of perhaps $10,000.
"That's the new market," Kurtis Squyres said of foreclosures, which made up 62% of all home sales in Riverside County last month.
The housing market "would really be in trouble if these bargain hunters weren't so active," DataQuick analyst Andrew LePage said.
Without these buyers, homes would languish even longer on the market, leading to steeper price cuts, LePage said. But he cautioned that the uptick in sales activity probably wouldn't lead to a bump in values in the near-term.
"At some point prices stabilize, but that is six to 12 months later easily," LePage said. "Then you're also looking at years of relative stagnation" before prices actually rise.
Price declines in Los Angeles and Orange counties have been less severe than in the Inland Empire, but they are falling just the same. Home values were down 23.9% in Los Angeles County in June from one year earlier, to a median of $415,000.
In Orange County, the median price in June was $495,000, down 23.3%. The median is the point at which half the homes sell for more and half for less.
By comparison, home values in San Bernardino and Riverside counties dropped more than 30%.
By the time the slump is over, home values throughout the region will be down about the same amount -- probably 40% to 50% below peak levels, predicts Los Angeles economist Christopher Thornberg of Beacon Economics.
