Housing Sales

Rising gas prices may be the latest ailment afflicting the housing market, as figures released Monday showed Southern California home prices plunging 27% in May from a year ago and falling even more precipitously in distant suburbs. Outlying areas like the Antelope Valley and the Inland Empire have long appealed to people who were willing to accept a burdensome commute for the chance to own a better house. But buyers are increasingly factoring gasoline costs into their purchase decisions, said Dan Griffith, a Rancho Cucamonga-based real estate agent.

Back when the real estate market was hot, sellers barely had to make their beds and do the dishes for their houses to attract buyers. Any extra effort often elicited multiple offers for over the asking price. In today's cool market, however, those same extras can mean the difference between getting one offer or none at all, says Lisa LaPorta, cohost of HGTV's "Designed to Sell." Sellers frustrated with the stagnant market should consider turning their anxiety into action.

Kathy and Jim Mocharski put their 10-year-old Rancho Bernardo home on the market in March knowing the competition would be stiff. "A lot of new homes are going in around us," Kathy Mocharski said. "To compete, we had to give our home the current styles and upgrades that buyers could get in a new house." Besides a thorough spring cleaning, they followed their instincts and the advice of their real estate agent and sunk close to $16,000 into the 2,500-square-foot house to get it market ready.

As many as 1,000 California families could qualify for low-interest loans to purchase foreclosed homes, Gov. Arnold Schwarzenegger has announced. The state-backed Community Stabilization Home Loan Program will make $200 million from bond sales available to first-time buyers in ZIP Codes with large numbers of foreclosures. The program will "help stabilize neighborhoods that have homes sitting empty," the governor said at a ceremony in Stockton. The city is one of the nation's worst hit from the collapse of the subprime mortgage market.

The top two floors of a Century City residential tower still under construction have been sold for a record $47 million to Candy Spelling, the widow of TV mogul Aaron Spelling. A $47-million price tag may seem like an enormous sum, but this is all about downshifting in the fast lane.

As homeowners lose their houses to foreclosure, builders worry about losing their shirts. Many small builders are struggling to stay in business, and larger, publicly traded development companies are reeling under huge losses as lenders tighten credit and housing sales stall. On Wednesday, Ryland Group Inc. of Calabasas reported a second-quarter loss of $241.6 million, seven times higher than the average estimate of a Bloomberg survey.

Sales of new homes fell in June for the seventh time in the last eight months, but the decline was less than expected, raising faint hopes that the nation's severe housing recession could be approaching a bottom. The Commerce Department reported Friday that sales of new single-family homes dropped 0.6% last month to a seasonally adjusted annual rate of 530,000 units. That was less than half the decline that had been expected, and the May performance was revised up a bit.

U.S. home prices fell by their worst rate of decline ever in May, according to data released Tuesday. The Standard & Poor's/Case-Shiller index of home prices in 20 cities declined 15.8% in May from the same month last year. The Los Angeles area saw a 24.5% price decline, a record year-over-year decrease. The region's home prices in May were down 27.5% from their September 2006 peak, according to the index. The greater L.A.

Southern California median home sale prices are down about 30% from their peak. That's about as far as they fell in the 1990s real estate downturn, and enough of a decline to have many asking: Is it time to buy? Some are already answering with their checkbooks. In the inland areas where prices have crashed hardest, buyers are slowly returning. But many of those who study housing markets say the worst is yet to come for real estate.

California home prices reached astonishing levels in 2005, but getting a loan was a snap at lenders offering low initial payments. At FirstFed Financial Corp., for example, the vast majority of borrowers weren't required to produce pay stubs or tax returns to prove they earned as much as they claimed. FirstFed executives say they started worrying as the year wore on. Rivals were giving "piggyback" second mortgages to stated-income borrowers, in effect wiping out down-payment requirements.