SAN FRANCISCO -- July home sales in southern California sank to the month's lowest level in 12 years as potential buyers held back, anticipating prices would ease amid the broad national housing downturn, according to a report released Tuesday.
A total of 17,867 new and resale homes sold last month in Los Angeles, Orange, San Diego, Riverside, San Bernardino and Ventura counties, marking an 11.4 percent decline from June and down 27.4 percent from a year earlier, according to DataQuick Information Systems.
Home sales in the region posted 22 months of consecutive declines from year-earlier levels, according to the La Jolla, California-based real estate information service,
The slump has been made worse in recent months by turmoil in the mortgage market triggered by rising defaults by so-called subprime borrowers falling behind on payments on risky adjustable-rate loans.
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Many of those borrowers are in or heading toward foreclosure, which analysts expect will add to an already large inventory of homes for sale. That will likely weigh on home prices.
The median price paid for a home in southern California inched up last month to $505,000, thanks to sales in the region's higher-end markets, marking a 0.6 percent rise from June and 3.7 percent from a year earlier.
Home prices in more expensive markets in the region are flat or rising modestly, indicating sellers maintain some leverage over buyers.
By contrast, prices are sliding in relatively affordable markets where mortgage troubles are at their worst, prompting potential home buyers to stay on the sidelines.
"These are interesting times because the slowdown in home sales isn't part of a broader economic slowdown, it's a post-frenzy re-balancing act," said Marshall Prentice, DataQuick president.
"The last time we had sales this slow, Southern California had been in recession for a few years," Prentice said. "Jobs were being lost in droves, people were leaving the area and home prices fell significantly. This time around we haven't seen that."
Homes sold after foreclosure accounted for 8.3 percent of all home sales in southern California last month, up from 7.7 percent in June and 2.0 percent a year earlier. The brunt of those sales fell on inland markets and have yet to weigh on home prices in other parts of the region.
DataQuick reported other indicators of distress in the region's housing market are sending mixed signals: "Financing with adjustable-rate mortgages and multiple mortgages has declined significantly. Down payment sizes are stable, flipping rates and non-owner occupied buying activity is flat."
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