San Fernando Valley Median Home Price Plunges $113,000 in January from a year ago

The L.A. Daily News reports:

The median price of a San Fernando Valley home plunged a record $113,000 in January from a year ago and sales sank to an all-time low as credit and foreclosure problems further pounded the market, a trade association said Wednesday.

The 18 percent price drop, to $500,000 from $613,000, is the first double-digit percentage decline since the early 1990s, said the Van Nuys-based Southland Regional Association of Realtors.

The latest median is nearly 25 percent below the record $655,000 set last June and is at the same level as in December 2004.

Still, prices would have to fall further to make them affordable and turn around the sluggish sales market, said Daniel Blake, director of the San Fernando Valley Economic Research Center at California State University, Northridge.

"I'm still not seeing a light at the end of the tunnel," Blake said. "If there is one, we're looking at it about this time next year. And I hate to say that to a Realtor."

January's steep price erosion reflects little activity at the upper end of the market, rising foreclosures and selling homes for less than what is owed on the mortgage, known as short sells, officials said.

And even qualified buyers are having trouble securing a mortgage because skittish lenders have tightened credit standards.

The National Association of Realtors said,a couple of years ago, that it was a good time to buy a house.I guess they were wrong.Since many in San Fernando Valley never really qualified for normal mortgages,in recent years,thanks to Fannie Mae and their promoting mortgages with 4% down:the bubble has burst.Thanks Fannie Mae without you leverage would have never been so dangerous.