Southern California's housing market took another small step toward recovery in September as the median sales price for homes in some areas rose above last year's levels -- the first such increases since the market crashed.
The median price paid for all homes in six Southland counties in September -- $275,000 -- was unchanged from August and 11% below the same month last year, according to San Diego-based MDA DataQuick.
But in Orange County, the median price rose modestly to $429,000 from $425,000 in the same month last year -- the first year-over-year gain since 2007, DataQuick said. If condominium sales are excluded, last month's median home sales prices in San Diego and Ventura counties also beat their September 2008 levels.
Christopher Thornberg, a Los Angeles economist who was an early predictor of the housing bubble, said several factors converged last month to give home sales a boost.
"Tax breaks, low interest rates and pent-up demand added up to create a surge in sales that's surely gone some way in stabilizing prices," he said.
But Thornberg cautioned that prices could fall again.
"The question continues to be, 'How is this going to stand up when the next wave of foreclosures hits the market?' " he said.
Even if the housing market takes another hit in the coming months, the bulk of the market correction is past, Thornberg said.
"If prices do fall again, it'll be another 10% to 15% max," he said.
The Southern California median price remains at 2002 levels, even without considering inflation, and is 46% below its peak level of $505,000 set in 2007. The median is the point at which half the homes sold for more and half for less.
Those relatively low prices and an $8,000 federal home-buyer tax credit set to expire at the end of November pushed the number of homes sold in September up by 5% over the same month last year and 0.2% above August.
Home sales in the last year picked up first in the lowest-priced inland areas, where a massive number of foreclosures pulled prices down. Last month's sales, with rising median prices in some areas, show that the mix of homes sold is normalizing.
Sales of homes priced at or above $500,000 constituted 21% of the total, up from 13% in January, DataQuick said.
Previously foreclosed homes are accounting for a smaller share of sales. In September, 40% of homes sold had been foreclosed within the last 12 months, down from a high of 57% in February.
