LOS ANGELES - Southern California home sales plummeted in September to the lowest level in two decades as lenders balked at financing the most expensive homes, a real estate tracking firm said Tuesday.
A total of 12,455 new and resale houses and condos were sold in September in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties, according to Data Quick Information Systems.
It was the slowest month since the firm began keeping records in 1988, DataQuick said.
Local experience may be different, however.
"It's a different desert," Greg Berkemer, executive vice president of the California Desert Association of Realtors, said. "It's not always apples to apples when you compare back 10 to 15 years. Some of these cities look dramatically different than they did back then. While those numbers are mathematically correct, I don't know how relevant they are."
The previous low for the six-county measurement region was in February 1995 when 12,459 homes sold. The September sales average is 25,258.
Home sales volume across the Coachella Valley fell 16.8 percent in August compared to the same month last year, according to the California Association of Realtors. The trade group also reported that the valley's median price rose 6.4 percent to $377,920 in August, the last month for which local figures are available.
Berkemer said that the five-year boom in local prices and volumes has created a situation for which there is no local precedent. Homeowners, he said, if they bought in the last five to seven years, have seen a nearly 80 percent to 100 percent appreciation in home value.
The current downtown in sales, he said, is not, like other downturns in the early 1990s, led by an overall recession.
"Because there is no historical reference in recent times, real estate agents, mortgage lenders and builders may not be able to conduct their business the same way they did in a recession-led housing downturn," Berkemer said.
"It is a new market that requires new ideas. Buyers, sellers and the Realtors who represent them, along with builders, developers and lenders need to reset their expectations and think and do business differently."
The six-county drop last month came as lenders cut the availability of so-called "jumbo" mortgages by half, a reflection of wider uncertainties in the housing market, DataQuick said.
"Some of last month's drop was part of the longer-term slowing trend, but most of it was due to mortgage market turbulence and difficulties in getting jumbo financing," DataQuick president Marshall Prentice said.
The nationwide credit crunch particularly has hurt jumbo mortgage loans - exceeding $417,000 - which fell by 50 percent from August, DataQuick reported.
The drop in jumbo loans also hurt the median sales price for September in Southern California, DataQuick said.
The figure fell to $462,000, down 7.6 percent from August and 4.0 percent from September of 2006.
"There's a good chance there will be some 'catch-up' sales activity between now and the end of the year as jumbo loans become more available," Prentice said.
Prentice said: "Still, we can't expect the market to re-balance itself until sometime in 2008."
Desert Sun October 17,2007
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