SoCal Home Prices Plunge Even Lower

Dataquick reported that the December median home price across all of Southern California dropped further below the $300K mark to just $278K.

Recall that the November data revealed the first sub-$300K median price since April of 2003 at $285K.

As shown to the right, this all represents quite a tumble from the all-time highs reached back in 2005, 2006, or 2007, depending upon the area.

Inland Empire home prices have now breached the threshold of a 50 percent decline from the peak, something that would have been unthinkable just a couple years ago when the counties of Riverside and San Berdoo were flying high.

These two counties posted the strongest gains late in the bubble inflation phase, but then quickly passed the other areas when the bubble burst as shown below.
For the year 2008, annual price declines ranged from 30 percent in Los Angeles County to 43 percent in San Bernardino.

My old stomping ground of Ventura County is right in the middle of the pack with a 36 percent decline, taking third place in the "Down from the Peak" measurement with a whopping 46 percent drop from the high of $630K in December of 2005.
Looking at recent comparable sales in our old neighborhood, it seems clear to me that the low-end distressed sales are pushing the median price way below what other home price measures would indicate.

Of course this is just one neighborhood, but a back-of-the envelope calculation indicates that the $338,000 median price in Ventura County is as much as $50,000 lower than it would be if it included a broader mix of sales. Since higher end homes just aren't moving, when they do start moving, even though their prices may continue to fall, they'll tend to push the median price up.

Since Marshall "almost all if not all of those gains are here to stay" Prentice is now retired, new DataQuick President John Walsh provides the commentary, this month about homebuilders:

The builders are in a holding pattern, staying alive until the market recovers. Mortgage interest rates last month were near record lows. Of course, that doesn't mean much if the money isn't actually being lent. It does look like the spigot is being opened a little bit, at least for low-cost home purchases.

Why does he think they're staying alive? According to this NY Times report, banks are now shutting down even the most successful homebuilders.

But, there's good news for those real estate brokers, sales agents, and title companies that have managed to survive - home sales are way up, foreclosures accounting for an astounding 55.7 percent of all home sales last month.
Cue the music!

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Comments

[msoori:]

I moved out of San Diego, CA to Atlanta GA in 2006and had no hesitation in moving because I had lived in Atlanta before and knew I could find affordable housing. I dont regret the decision, but of course I miss a few things like the ability to go to the beach every weekend.

Jan 21 08:28 AM

[Guero:]

Didn't any of you Californicators stop at some point & ask yourselves "how much longer can this go on? What is the end game here?" Did you really think that home prices were going to rise indefinitely? $450 per square foot for 50 year old 2 bedroom moldy ranch houses in the 'hood! Yeah, that's the ticket! Seriously.

Jan 21 10:24 AM

[romorris:]

Sure did. Bailed 9/2005 ... and didn't put the money in the stock market.


On Jan 21 10:24 AM Guero wrote:

> Didn't any of you Californicators stop at some point & ask yourselves
> "how much longer can this go on? What is the end game here?" Did
> you really think that home prices were going to rise indefinitely?
> $450 per square foot for 50 year old 2 bedroom moldy ranch houses
> in the 'hood! Yeah, that's the ticket! Seriously.

Jan 21 10:59 AM

[RWCMom:]

When the only place to get a job was California, you paid what you had to for housing. We are all immigrants, constantly moving to where the jobs and opportunities are be they another state or another country. It's a story as old as time itself.

Jan 21 11:59 AM

[Griz:]

As job losses continue to mount coupled with a mountain of Alt-A mortgages coming due in 2009-2010 (both a epic problem across CA), we will see price declines begin climbing up the housing "food chain".
You are correct Tim, in that the low-end has collapsed and is pulling down the median price of late. But when the mid-upper end home owners run out of their re-fi cash reserves, the level of house prices will continue to show weakness.

Jan 21 01:02 PM

[neocon4jesus:]

I did. I sold my house in Long Beach for $700K in 2007, moved to Wisconsin and bought the same house for $150K. But I did go to USC, so maybe that had a lot to do with thinking. about it and saying WTF!


On Jan 21 10:24 AM Guero wrote:

> Didn't any of you Californicators stop at some point & ask yourselves
> "how much longer can this go on? What is the end game here?" Did
> you really think that home prices were going to rise indefinitely?
> $450 per square foot for 50 year old 2 bedroom moldy ranch houses
> in the 'hood! Yeah, that's the ticket! Seriously.

Jan 22 10:10 AM

[bigmoney:]

"housing only goes up. They aren't making any more land, etc, etc.

it is fascinating that people are / were paying 10x family income (and beyond) for a house. Many of these people cashed out early, moved to my city, and bought several houses for cash. Bidding up the price of housing here in the process.

Jan 24 06:11 PM