Housing Prices

In parts of Southern California, the housing crash has upended a basic tenet of the American dream: that home values always increase over the long term. Properties in several areas are selling for less than they did 20 years ago, and that's not even counting the effects of inflation. The reversal is a bonanza for some first-time buyers.

There are homes. And then there is Candy Land -- all 56,500 square feet of it. Candy Spelling, widow of legendary TV producer Aaron Spelling, has put her 4.7-acre residence in Holmby Hills up for sale. Priced at $150 million, it's currently the most expensive residential listing in the U.S. Whether Spelling will have to take a haircut on that asking price in today's market remains to be seen. If so, she'll be prepared: The home has its own barbershop. Plus a whole lot more.

The Southern California real estate crash has finally reached the high-end areas of the Westside. Home prices in Beverly Hills, Santa Monica and Malibu -- which continued to soar well into 2008 -- finally tanked at the end of the year, losing between 26% and 30% of their value in just a few months, the latest data show.

The bad economic news keeps piling up. On Thursday, three milestones showing the depths of the downturn were reached: The number of workers filing unemployment claims hit an all-time high, sales of new homes fell to an all-time low, and production of durable goods dropped for the fifth straight month, boosting inventories to their highest level since at least 1992. And it's not over yet. Today, the Commerce Department is scheduled to release its initial estimate of the U.S.

Southern California home prices may have finally hit bottom, with median values rising last month for the first significant increase in two years, new data show. Along with the 6.4% rise in prices from May, fewer than half of the sales were foreclosures -- the first time that has happened in nine months.

Home prices are way down in Southern California. But the real estate information service Zillow.com says the median values in Los Angeles and Orange counties may not have fallen quite as much as is often reported. That's because the median sale price -- which provides a quick market snapshot and is reported each month in the Los Angeles Times and other media -- can exaggerate the extent of a market downturn, economists say.

Nationwide sales of previously owned houses and condominiums fell 20% in November from the same month a year ago, according to data released Monday. But the month's sales were up slightly over October. The National Assn. of Realtors saw the October-to-November rise as an indication that the housing market might be approaching a bottom. Lawrence Yun, the organization's chief economist, called the modest bump up in sales "a sign that the housing market is stabilizing."

Soaring prices. Precious few homes. Bidding wars. Sound like Southern California a few years back? Welcome to an unexpected bright spot in global housing: Baghdad. Attracted by news of decreased violence, thousands of displaced Iraqis returning to Baghdad's safer neighborhoods are fueling a bit of a real estate frenzy. Last year, home prices plummeted and rents dropped as Iraqis left town in search of more stability.

Sales of new single-family homes plummeted a record 26% last year and builders slashed prices by the most since 1970 in a struggle to cope with the housing bust, a U.S. government report showed Monday. The Commerce Department report offered little hope for a turnaround any time soon as a record one-month drop in the median home price for December failed to stoke demand and the number of months needed to clear the inventory of unsold homes rose. Sales in December fell 4.

As home prices soared higher earlier this decade, the buying frenzy was fueled in part by what real estate industry experts now claim were exaggerated -- or outright fraudulent -- appraisals. A lawsuit filed by two couples this week adds a new twist: It claims that Los Angeles builder KB Home and a unit of lender Countrywide Financial Corp. pumped up appraisals in their Sacramento-area development to sell homes at higher prices.