L.A. prices keep falling

Here's a sobering stat: In January 2008 the median price of an L.A. County home was $458,000. Last month it was $300,000. That's a 34.5 percent tumble over a 12-month period, according to Dataquick's latest numbers. The housing market hasn't really changed all that much in the last six months or so: L.A. County sales are strong - a 33.4 percent increase from a year earlier - while prices are plummeting. But there's more to the story: higher-end communities like Bev Hills, Santa Monica, Newport Beach and Laguna Beach have logged record-low or below-average sales - and those same areas have seen relatively small price declines.

Keep in mind that for the better part of 2008, you had lots of potential sellers holding off on deals because they didn’t want to drop their prices, and then you had potential buyers holding off because they couldn’t get loans. This might explain why there was a 42 percent plunge in the number of million-dollar homes sold last year. “We’ve heard a lot of talk regarding the decline in home values about how no one wants to catch a falling knife," says John Walsh, DataQuick's president. Most of the action remains in the inland areas of L.A., places that have taken the biggest hit from subprime and other questionable lending. Foreclosures accounted for 60 percent of all homes sold in Socal last month (52 percent in L.A.). From the press release:

“We can only assume,” Walsh continued, “that many first-time buyers, investors and others buying in these areas have concluded it’s not worth trying to time the price bottom perfectly. They’re happy to lock in substantial discounts relative to the peak. Whether the inland sales pace holds will hinge on factors such as the health of the job market, the availability and cost of financing, and the new efforts to stem foreclosures and halt price depreciation – efforts that could eventually tame inland bargain hunting.”

The push for lower-priced homes in lower-priced communities is seen by the ways in which people are getting financing. Government-financed FHA mortgages, which have become the most popular form of borrowing for first-time buyers, represented 40.4 percent of all homes sold in January. Jumbo financing, geared to high-priced homes, totaled just 9.2 percent (it represented about 40 percent of all purchase loans before the August 2007 credit crunch).

JANUARY HOME SALES (% change from 2008)

Los Angeles 4,532 +33.4%
Orange 1,806 +40.4%
Riverside 3,320 +71.2%
San Bernardino 2,532 +127.9%
San Diego 2,459 +34.7%
Ventura 578 +36.6%

JANUARY MEDIAN HOME PRICES (% change from January 2008)

Los Angeles $300,000 -34.5%
Orange $370,000 -28.8%
Riverside $195,000 -41.2%
San Bernardino $162,000 -45.7%
San Diego $280,000 -34.7%
Ventura $335,000 -29.9%

Source: MDA DataQuick, DQNews.com