SoCal Median Price Inches Up; FC Resales Make Up Smaller Share

rn California home sales rose for the 11th consecutive month in May, as sales of $500,000-plus homes started to come back, reports MDA DataQuick, a San Diego-based information service. The median price paid increased slightly from the prior month for the first time since July 2007 – the result of a shift in market activity where sales of deeply discounted foreclosures waned and mid- to high-end purchases rose, DataQuick says. A total of 20,775 new and resale houses and condos closed escrow in May in the Southland region, which includes San Diego, Orange, Los Angeles, Ventura, Riverside and San Bernardino counties. That total was up 1.3% from 20,514 in April, and up 22.8% from 16,917 a year ago, the company says. May's sales were the highest for that month since May 2006, when 30,303 homes sold, but were 21.2% below the average May sales total since 1988, when DataQuick's statistics begin. Foreclosure resales – homes sold in May that had been foreclosed on in the prior 12 months – accounted for 50.2% of all Southland resales. That was down from 53.5% in April and from a peak of 56.7% in February. May's figure was the lowest since foreclosure resales made up 50.9% of all resales last October. Last month, sales $500,000 and above rose from 15.2% of sales in April to 17% in May. The last time the $500,000-plus market made up more than 17% of all sales was last October, when they were 19.9% of sales, DataQuick says. The median price paid for all new and resale houses and condos sold in the six-county Southland last month was $249,000, up 0.8% from $247,000 in April but down 32.7% from $370,000 a year ago. "We appear to be in the early stages of the market, gradually tilting back toward a more normal balance of sales across the home price spectrum," says John Walsh, DataQuick president. "As more sellers get realistic, more buyers get off the fence and more lenders offer reasonable terms for high-end purchase financing, we'll see a more normal share of sales in the more established, higher-cost areas that have been nearly comatose." Among the reasons high-end sales have been nearly frozen the past year: The "jumbo" mortgages needed to buy such homes have been more expensive and much harder to obtain since August 2007, when the credit crunch hit. Before then, nearly 40% of Southland sales were financed with jumbo loans, then defined as over $417,000. Last month, it was only 12%, though that was up from 10.6% in April and the highest since last November, when $417,000-plus loans were used for 12.2% of home purchases. At the lower end of the price spectrum, first-time buyers continue to rely heavily on government-insured Federal Housing Administration (FHA) financing. Such loans were used to finance 38.4% of all Southland home purchases last month, down slightly from 38.9% in April but up from 19.7% a year ago. In the Inland Empire, more than half of all May home purchases were financed with FHA loans. Absentee buyers, including investors who will have their property tax bills sent to a different address, bought 19.4% of the Southland homes sold last month. That's up from 16.9% a year ago and 18.6% in April. The monthly average since 2000: 15%. SOURCE: MDA Da

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