According to DataQuick, “The onset of spring did little to thaw Southern California’s semi-frozen housing market: The seasonal boost in sales between February and March was less than half its normal level and a record low.”
The data shows that 12,808 new and resale homes and condos sold in Southern California Los Angeles, Orange, San Diego, Riverside, Ventura, and San Bernardino Counties in March.
Although that figure was 18.8 percent higher than the 10,777 sales reported in February, it was down 41.4 percent from March 2007.
In addition, while DataQick’s statistics show an average seasonal increase of 38 percent in sales between February and March for the last 20 years, the 18.8 percent increase for March 2008 was the lowest seasonal sales boost in DataQuick’s records, which go back to 1988.
As expected, the data showed a continued increase in foreclosure resales and a decline in median sale prices.
More than one out of three Southern California homes that resold last month, nearly 38 percent, had been foreclosed on at some point in the prior year. Last year such sales were only 8 percent of the market. At the county level, foreclosure resales ranged from 28.8 percent in Los Angeles County to 56.4 percent in Riverside County.
The median price for a Southland home last month was $385,000, the lowest since $380,000 in April 2004. Last month’s median was down 5.6 percent from February’s $408,000, and down a record 23.8 percent from $505,000 in February 2007.
Significantly, the psychology of the current real estate market is creating its own downward drag on prices, as potential sellers are waiting for the market to hit bottom and potential buyers are waiting for prices to fall further.
DataQuick president Marshall Prentice explained: “We continue to believe a lot of people who could be buying or selling right now are opting to sit tight until they sense we’ve hit bottom. Often what we’re left with, especially in inland areas, are sales driven by foreclosure or the threat of it.”
Here’s what we know:
Those who can hold on to their property are holding.
Those who can buy are waiting.
Like scene before the climax in an old Hollywood Western, the California real estate stand-off continues…
Or as Commander Bart Mancuso says in The Hunt for Red October: “The hard part about playing ‘chicken’ is knowing when to flinch.”