California home sales surged in July, prices fell
AP Business Writer
LOS ANGELES — California homebuyers sprung to life in July, pouncing on foreclosed homes and deeply discounted properties but largely ignoring pricier homes that have been languishing on the market, a research firm said Tuesday.
Buyers drove sales up more than 12 percent from July 2007, resulting in the biggest jump in sales in four years, according to MDA DataQuick.
The surge in sales was welcome news for the state’s beleaguered housing market, which remains bloated with the nation’s highest number of foreclosed homes and caught in a spiral of falling home prices.
Still, the positive sales figure offered little relief for those homeowners sweating the decline in home values.
The flood of foreclosure sales helped drag down the statewide median home price ” or the midpoint between the highest and lowest price ” to $318,000, a drop of 33.5 percent from July 2007.
The July median price was down 3 percent from June. It peaked in May 2007 at $484,000.
About half the drop in the median price was due to depreciation, with the rest attributed to fewer sales of high-end homes and a decline in homes purchased with traditional jumbo loans exceeding $417,000, the firm said.
In all, 39,507 new and preowned homes were sold statewide last month. Sales were up 12.2 percent from June’s total.
Foreclosed homes accounted for 40.3 percent of all the homes sold last month, the firm said.
July’s home sales count was the highest since June 2004, but it still was below the average sales volume for the month over the past 21 years.
That’s due in part to sales remaining lackluster in coastal areas where homes are more expensive and foreclosures not as common.
“We’re looking at activity that’s clearly happening in the markets that are currently distressed,” said John Karevoll, an MDA DataQuick analyst.
Generally, the housing markets in the state that have seen fewer foreclosures and home prices that hold up better are those with older housing stock and established neighborhoods.
In contrast, areas with newer homes, particularly markets where homebuilders developed new home communities in recent years, have seen steeper price declines and higher rates of home loan defaults and foreclosure, Karevoll said.
In Sacramento County, which has been racked by foreclosures, sales jumped 73.2 percent from a year ago, while the median home price plunged 35.2 percent to $210,000.
In the San Francisco Bay area counties of Solano and Contra Costa, also foreclosure hotbeds, 11 ZIP codes saw sales of existing homes at least double from a year ago.
By comparison, in Los Angeles County, where the rate of foreclosures is lower than some inland counties, sales fell 3.2 percent in July versus the same month last year.
That’s little consolation for renters looking to buy homes outside areas hardest-hit by foreclosures.
Sales in coastal areas remained stymied by still-high prices and tougher mortgage lending conditions that require borrowers to put down larger down payments.
“The big problem with the coastal areas is that people have this perception of the market having come way down so they go out shopping for a home thinking they’re going to get a great deal and there just aren’t any deals there,” Karevoll said. “You’re not going to find prices are 30 percent from where they were two years ago. It just hasn’t happened yet.”
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