15 Year Low In Southern California Real Estate Sales

The L.A. Times reports:

Home prices fell in most Southern California neighborhoods and the number of sales tumbled to a 15-year low for August -- driven down by tougher lending standards, mounting foreclosures and skittish buyers.

Sales for the month plunged 36% from a year earlier. What's more, 71% of the Southland's ZIP Codes showed price declines, according to figures released Wednesday by DataQuick Information Systems. The survey excluded areas with 14 or fewer sales.



"Prices are falling everywhere," said Christopher Thornberg, a former UCLA business professor who is now a principal at Los Angeles-based Beacon Economics.

In recent years, the housing market had been propped up by the widespread use of home loans with low introductory teaser rates -- allowing prices to outpace income growth, he said. But with those easy-credit loans all but gone, values are coming back into balance.

"People just don't have the income to support these prices except with crazy mortgages -- and now the mortgage money is going away, and people are walking away from their homes," Thornberg said.

Nearly 9% of the homes sold last month were foreclosure properties, DataQuick reported, up from 2.2% a year earlier.

Most communities are seeing price declines, and the downtrend is strongest in outlying suburban areas such as in Riverside County, where affordable homes attracted droves of first-time buyers -- many of whom could not qualify for traditional fixed-rated mortgages.

Today, many of these same buyers who counted on rising home values can't refinance their loans and can't make the escalating payments on their adjustable-rate mortgages, forcing them into foreclosure and putting yet more properties on the market.

We predict the next two months aren't going to be much better for housing.Many mortgages are coming due with no equity in them,which means they will not be able to get a new mortgage.If you are thinking of buying right now,why not wait (if you can) you'll get an even lower price next year at this time.