SoCal Home Sales Soft in May, Prices Drop

June 13, 2011 No Comments »

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Southern California home sales remained weak in May thanks to a poor move-up market and record low sales of newly built houses, DataQuick reported today.

Last month, a total of 18,394 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange county.

The numbers were up 0.3 percent from April, but down 17.4 percent from May 2010, when the homebuyer tax credit was still in play.

(Do mortgage rates change daily?)

Meanwhile, the median price paid last month was $280,000, steady from April, but off 8.2 percent from the $305,000 seen a year ago.

It’s the largest year-over-year decline since the median price fell 10.9 percent back in September 2009.

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Still, the median price is 13.4 percent higher than the low point for the current real estate cycle – $247,000 in April 2009, but well below the peak of $505,000 seen in mid-2007.

Distressed Sales Still King

Distressed sales accounted for more than half of the Southland resale market last month – about one in three were foreclosures, while roughly one in five was a short sale.

Move-up buyers seem to be non-existent, given their lack of home equity, and in many cases, negative equity, which even prevents refinancing.

FHA loans accounted for 33.6 percent of all mortgages used to purchase a home in May, jumbo loans grabbed a 17.1 percent share of purchase money financing, and adjustable-rate mortgages were used 8.8 percent of the time.

Cash buying is still strong, with 29.1 percent of buyers opting to make their purchase without a mortgage.

So it’s looks as if it might be a cruel summer, even with mortgage rates just above all-time lows, thanks to ongoing economic woes and a glut of inventory.

Read more: Are mortgage rates negotiable?

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