Southland home prices set new record

Southern California’s housing market lost much of its sizzle last year but wrapped up 2006 setting a price record while the decline in sales slowed, data released Tuesday showed.

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 earlier and 1.6% higher than 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, a 22.3% drop from a year earlier and the lowest volume for a December since 1995. 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 with previous months helped push the Southland’s median home price to a record, DataQuick said.

The price record and improving sales add credence to some analysts’ views that the Southland market is beginning to stabilize after a five-year boom. The previous median-price peak was $493,000, 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,” said DataQuick President Marshall Prentice. “Most of that increase is here to stay.”

Analysts expect the region’s price gains to continue to shrink this year, particularly in comparison to recent years when they rose at above-average rates.

“The market is still readjusting after the frenzy of 2004 and 2005,” Prentice said. “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?”

For the whole year, prices were up 5.7% to $486,000, and sales fell 19.4%. In 2005, the median price rose 16.5% from the year before. Sales slipped 0.4%.

“If you take last year’s data and put it anywhere else, you would have said it was a banner year,” said Patrick Lashinsky, executive vice president of ZipRealty Inc., an Emeryville-based online brokerage that operates in Southern California. “The only reason it doesn’t look as strong is because we’re coming off these irrationally exuberant years.”

Nonetheless, the real estate slowdown has begun to send ripples across the region. Mortgage companies and home builders have begun laying off workers, and the number of homeowners defaulting on mortgage payments or falling into formal foreclosure has begun to rise from recent record lows.

In San Diego County, which was the first in the region to see price growth depreciation last year after six years of gains, the December median was down 6.4% to $483,000, from $516,000 a year ago. In November, the median had dropped 6.9%. Sales fell 15.2%, to 3,613 homes.

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 rise 3.4% to $642,000. Sales fell 28.9%, to 2,719.

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

San Bernardino County, considered the region’s 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 falling prices, as its median fell 5.9% to $593,000 and sales fell 13.8%, to 978.

As reported Monday, Los Angeles County’s median rose 6.5% to $522,000. Sales fell 12.9%, to 7,703.

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

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Median price and number of new and previously owned homes sold in December, by county and overall in Southern California

*--* % change Median % change Number of from price from County homes sold year ago (thousands) year ago Los Angeles 7,703 -12.9% $522 +6.5% Riverside 4,318 -31.5 432 +5.1 Orange 2,719 -28.9 642 +3.4 San Bernardino 3,154 -31.1 372 +3.0 Ventura 978 -13.8 593 -5.9 San Diego 3,613 -15.2 483 -6.4 Southern California 22,485 -22.3 495 +3.3

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Source: DataQuick Information Systems