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Even as home sales were picking up in the last half of 2009, much of the action had been centered at the lower end, where financing was easier, foreclosed properties were priced to sell, and a tax credit for first-time homebuyers brought in lots of extra business. At the higher end, where banks were more reluctant to lend, the pace generally was a lot slower. But last month, the folks at Dataquick began noticing a change in the pattern, as sales picked up in places like Bev Hills, Santa Monica and Newport Beach. The median price for L.A. County was $339,000, up $10,000 from the previous month and $19,000 from December 2008. Sales jumped 31.3 percent from a year earlier, way more than any other county in Socal (Riverside was actually down 3.4 percent). From the Dataquick release:
The percentage of Southland homes sold above $500,000 last month rose to 20.2 percent of all sales, up from 16.5 percent a year earlier and the highest since it was 23.6 percent in August 2008. On average since 2000, $500,000-plus sales have made up 36.5 percent of total sales. Right before the credit crunch hit in August 2007, making larger "jumbo" mortgages more expensive and harder to obtain, $500,000-plus sales made up about 52 percent of Southland transactions.
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"Several forces have pulled the region's median sale price out of its nose dive and given it lift," said John Walsh, MDA DataQuick president. "We've seen the re-selling of foreclosed homes fall off its peak in newer, lower-cost inland areas, while at the same time sales have started to pick up in some of the more established expensive areas. That simple shift in what's selling, and what's not selling, puts upward pressure on the median. That's statistical. But we've also seen price floors, however temporary, form in many areas recently as the foreclosure inventory dwindled and buyers took advantage of lower prices, lower mortgage rates and tax credits. A meaningful comeback in the jumbo loan market would provide another big boost in the pricier areas."
What's curious is that jumbo mortgages (those above $417,000) still accounted for only 16.7 percent of all home purchase loans. Before the credit crunch, those loans made up nearly 40 percent of purchases. So this adjustment might just be a blip, though it's certainly worth keeping an eye on.
DECEMBER HOME SALES (% change from December 2008)
Los Angeles 7,679 31.3%
Orange 2,885 11.8%
Riverside 4,282 -3.4%
San Bernardino 2,934 2.5%
San Diego 3,652 9.8%
Ventura 896 2.3%
DECEMBER HOME PRICES (% change from December 2008)
Los Angeles $339,000 5.9%
Orange $435,000 9.6%
Riverside $196,000 -6.2%
San Bernardino $154,000 -14.4%
San Diego $330,000 10.0%
Ventura $360,000 6.5%
Source: MDA DataQuick, DQNews.com
Mark Lacter created the LA Biz Observed blog in 2006. He posted
until the day before his death on Nov. 13, 2013.