Thump, thump. Thump, thump.
Listen closely, and you just might hear a faint heartbeat in the jumbo mortgage market in Southern California, almost two years after the market for higher-end homes lost its pulse amid the implosion of the non-conforming mortgage market.
Shifting sales activity away from a heavily-discounted glut of foreclosures in the Southland and a re-emergence of at least some sales activity among homes in the $500,000-plus range helped push the median price of a Southern California home upward in May for the first time since July 2007, according to data released Wednesday by San Diego-based MDA DataQuick
SoCal home sales volume rose for the 11th consecutive month in May, the highest total for May since 2006, as foreclosures continued to fuel the market for sales. MDA DataQuick said that a total of 20,775 new and resale houses and condos closed escrow in San Diego, Orange, Los Angeles, Ventura, Riverside and San Bernardino counties last month. That was up 1.3 percent from 20,514 in April and up 22.8 percent from 16,917 a year ago.
Before calling a bottom in SoCal, however, MDA DataQuick cautioned that sales volume for May was still 21.2 percent below the average May sales total since 1988, when the company's statistics begin. And homes sold in May that had been foreclosed on in the prior 12 months still accounted for 50.2 of all Southland resales, the company noted. That was down from 53.5 percent in April and from a peak of 56.7 percent in February, but still represents half of all sales activity in the region.
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 percent from $247,000 in April -- but down 32.7 percent from $370,000 a year ago. While the median price hadn’t risen from one month to the next since July 2007, last month’s median was the second-lowest for any month since it was $242,000 in February 2002.
Prices in SoCal now stand 50.7 percent below the peak $505,000 median reached in spring and summer of 2007.
Prices were bound to slow their freefall at some point, clearly. The remarkably sharp declines in the Southland’s median sale price over the past year have been exacerbated by a shift toward an above-average number of sales occurring in lower-cost inland markets rife with discounted foreclosures, MDA DataQuick officials said. The shift in sales mix away from REO and foreclosed inventory helped push median prices upwards in SoCal -- a trend that may prove temporary, in light of the various foreclosure moratoria that went into effect at the end of last year.
“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. 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,” said John Walsh, MDA DataQuick president.
“Let’s not forget we’re into the traditional home buying season right now,” he continued, “meaning more people are purchasing for all of the normal reasons, such as a new job or to get settled before school starts. Many are concerned with finding the right home in the right area, not just the most deeply discounted home.”
Investors continue to make their presence felt in SoCal, as well, according to DataQuick statistics. Absentee buyers, including investors who will have their property tax bills sent to a different address, bought 19.4 percent of the Southland homes sold last month. That’s up from 16.9 percent a year ago, and 18.6 percent in April. The monthly average since 2000: 15 percent.
Write to Paul Jackson