Sales down, prices up for 2006 housing market

Southern California's housing market lost much of its spark last year but wrapped up 2006 setting a new price record even as the number of sales hit a decade low, data released today showed.
By: Annette Haddas: latimes.com
The median price paid for a home in the six-county region was $495,000 in December, a new high. That was up 3.3% from a year ago and up 1.6% from the month before, according to DataQuick Information Systems, a La Jolla-based research firm that compiles monthly real estate statistics.

A total of 22,485 new and resale homes were sold in Los Angeles, Orange, Ventura, Riverside, San Bernardino and San Diego counties last month, which was a 22.3% drop from a year ago. Yet, volume was up 10.3% from November.

December is one of the strongest months for real estate activity, as buyers and sellers seek to complete deals before the end of the year. Last month's improved showing in sales compared to previous months helped push the Southland's median home price to a record, DataQuick said.

Moving into 2007, however, analysts expect the region's market to continue to decelerate, particularly in comparison to recent years when the real estate market was booming at above-average rates.

"The market is still readjusting after the frenzy of 2004 and 2005," said DataQuick President Marshall Prentice. "In any real estate cycle, when prices peak, they don't level off at that peak, they come down some. The question is, how much?"

In San Diego County, which was the first in the region to see price depreciation last year after six years of gains, the December median fell 6.4% to $483,000 from $516,000. In November, the median had dropped 6.9%.

Analysts are watching the San Diego market closely as a leading indicator for the rest of the Southland.

Orange County, which had no growth in prices year over year in November, saw its median tick up 3.4% to $642,000, while sales fell 28.9% to 2,719.

The median price in Riverside County logged a new record, rising 5.1% to $432,000. Sales there fell 31.5% to 4,318.

San Bernardino County, which is considered the most affordable, saw its median climb 3% to $372,000 as sales declined 31.1% to 3,154.

Ventura County posted a fourth consecutive month of depreciating growth as its median fell 5.9% to $593,000 and sales fell 13.8% to 978.

As reported earlier, Los Angeles County's median rose 6.5% to $522,000 while sales dipped 12.9% to 7,703.

The previous median price peak was $493,000, which was set in June. Year-over-year price increases have been in the single digits for nine months.

"We need to remember that prices have gone up 100% in Southern California in the last four years," Prentice said. "Most of that increase is here to stay."

The median price is the price at which half of all homes sold for more, half for less.