Housing prices in California take big drop
By The Associated Press and Jacob Adelman |
LOS ANGELES — The median home price in California dived a whopping 41.5 percent from a year ago, as deeply discounted foreclosures drove down the market to a level last seen eight years ago, a real estate tracking firm said Thursday.
The statewide median price fell to $224,000 last month, compared to $383,000 in January of 2008, San Diego-based MDA DataQuick said.
It was the lowest median price posted since May 2001, when the statewide figure was $220,000.
DataQuick President John Walsh said the plunging prices have motivated many first-time buyers, investors and others to stop trying to predict when prices might hit bottom.
"They"re happy to lock in substantial discounts relative to the peak" prices posted in mid-2007, when the median price hit $665,000 in Northern California and $505,000 in Southern California, he said.
An estimated 29,458 new and resale houses and condos were sold in the state last month, an increase of 53.9 percent from the year-ago period, DataQuick said.
Foreclosures accounted for 54 percent of sales last month in a nine-county region of Northern California and 58 percent in six Southern California counties."For months, we"ve seen quite a flurry of sales activity in many inland areas where prices have fallen more in line with local incomes," Walsh said.
The January figures, which mark the seventh consecutive month of year-on-year price declines, were released a day after President Barack Obama announced a $75 billion plan to aid borrowers who owe more on their mortgages than their homes are currently worth, and those who are on the verge of foreclosure.
Gary Painter, a professor at the University of Southern California"s Lusk Center for Real Estate, said the initiative and efforts to loosen credit could reverse the steady price drops.
"That"s the hope," he said. "Is that going to happen? I don"t know."
The rescue efforts could tame the inland bargain-hunting that Walsh said is driving sales.
"It"s hard to imagine resale activity getting much stronger in many inland areas, especially if the deep discounts fade as a result of new efforts to stem foreclosures and stabilize prices," he said.
The median home price in the nine-county region of Northern California plunged a remarkable 45.5 percent in January from a year ago. The figure stood at $300,000 last month, compared to $550,000 in January of 2008.
In a six-county region of Southern California, the median price fell nearly 40 percent to $250,000 last month, from $415,000 in the year-ago period.
In Northern California, sales increased 41 percent in January from a year earlier. That figure jumped 53 percent in Southern California.
Sales could slow if the Obama administration"s efforts to tackle the foreclosure crisis are successful, Painter said.
Jacob Adelman