With no end in sight to the slump in the residential market, Los AngeleCounty home sales continued to swoon in March while the median price of a single-family home hit a three-year low.

Sales of new and existing single-family homes sank 52 percent year over year, falling to 2,532 from 5,286, according to data supplied to the Business Journal by HomeData Corp., a Melville, N.Y., company.

The median price plunged over the same period to $465,000, 17 percent lower than a year ago and 21 percent off the peak reached in May and July of 2007.

The slowdown had some analysts predicting that sales would not fall further, though they would likely remain flat for some time to come.

“We are obviously at the bottom of the market in regard to the number of transactions,” said Steve Johnson, director of Metrostudy Southern California, a housing market research firm. “I think we can stay at the bottom. Sales activity will probably stay flat through 2009.”

Since October, sales have been running at about 50 percent compared with the prior year, with transactions primarily taking place among people who are forced to enter or leave the market for imperative reasons such as a job transfer or divorce, Johnson said.

What is less clear is whether the fall in median prices is reaching its bottom or still has a way to go. The county’s $465,000 median was last reached exactly three years ago in March 2005. But that was still well into the eight-year housing boom, which artificially inflated prices through easy credit for both prime and subprime borrowers.

Since last year, though, a combination of tougher credit conditions and the collapse in the private secondary market for securitized mortgages has depressed demand for affordable homes and the supply of loans to finance them.

“Tighter underwriting standards have knocked the legs out of the market for homes under $500,000,” said Robert Kleinhenz, deputy chief economist for the California Association of Realtors.

Neighborhood review

Peripheral areas have been hit especially hard.

In Palmdale, the median price in the 93550 ZIP code in March slid 37 percent year over year to $212,000 while transactions fell from 69 to 38. Lancaster fared little better, as prices plunged 34 percent to $190,000 in the 93534 ZIP code on sales of less than half last year’s volume.

Middle-income neighborhoods closer to the urban core did somewhat better but also saw significant declines. West Covina’s three ZIP codes saw price drops of 17 percent to 22 percent. In Lakewood, prices were down 12 percent to 23 percent.

At the top of the Los Angeles market, though, some neighborhoods still were holding their value despite a reduction in sales volume.

In the 91403 ZIP code in Sherman Oaks, prices swelled 42 percent in March, rising from $975,000 to $1,382,000. But only 12 homes were sold, a decline of 29 percent. Prices jumped 12 percent to hit $982,000 in the Westlake Village ZIP code of 91361, while sales slumped more than 50 percent.

In Malibu, prices were off 12 percent to $1.86 million, but that only reflected four home sales, compared with 11 a year ago.

“We are still seeing big-ticket sales and prices are pretty stable. However the number of transactions is a little slower than this time last year,” said Madison Hildebrand, a broker at Coldwell Banker in Malibu.

Last month, Hildebrand closed escrow on a home in Malibu for $3.7 million, with multiple offers on the property. “If the home is priced fairly, then it will move,” he said.

A similar situation is seen in the market for high-end condos in affluent neighborhoods throughout the Westside, even as overall condominium sales declined 56 percent and prices slid 9 percent to $411,000, according to HomeData.

In Beverly Hills, for example, condo prices rose as much as 127 percent in one ZIP code, but the figures reflected sales of only four units throughout the entire city. One unit sold for $1.73 million.

“If you have 100 people cross the threshold, you should be able to sell to 5 to 6 percent of those in a balanced market,” said Lynn Borland, president of Wilshire Realty, a brokerage that sells high-rise condos and town homes on the Westside, downtown and Hollywood. “Today you only get one sale for every 100 visitors.”

Luxury condo buyers have the money to buy they tend to pay mostly in cash and finance a small balance with small loans readily available but are sitting back waiting for additional price drops, Borland said.

Rising foreclosures

Meanwhile, builders have slammed the brakes on new home construction in an effort to reduce supply.

Building permits issued for single-family units in L.A. County plummeted 62 percent in January compared with the same time last year, based on data from the California Building Industry Association. The number of permits fell from 788 to 302 year over year.

But the decline in housing starts was more than offset by the deluge of foreclosures flooding the market. Foreclosure activity statewide rocketed 131 percent in February, with 53,629 filings for default notices, auction sale notices and bank repossessions, according to market research firm RealtyTrac Inc.

In February, California registered the nation’s second-highest foreclosure rate, with one in every 242 homes filing for foreclosure during the month.

And with more potential homebuyers sitting on the sidelines, the index score of unsold homes in Los Angeles doubled in February to 21.1 from 10.6 a year ago, according to the state Realtors association.

The index score is the ratio of the number of homes available for sale to the number of sales that took place.

A variable that could affect future sales and price fluctuations is action by the government to stimulate and prop up the market.

Last week, Democrats and Republicans appeared close to an agreement that would provide state and local governments with $10 billion in bond funds to refinance subprime mortgages.

And government-sponsored agencies Fannie Mae and Freddie Mac already have been temporarily allowed to purchase home loans as high as $729,000, which will permit mortgage lenders to sell jumbo mortgages and initiate more loans.

The actions should provide some boost to the market, but no one knows how much.