Home sales rose slightly and prices slid in October compared with the prior month as the Los Angeles County real estate market searched for a bottom now that federal home buying tax credits have expired.
The median price fell 3.6 percent versus September to $346,000. It was the first drop on a month-to-month basis since the credits expired in April, according to HomeData of Hicksville, N.Y.
At the same time, sales rose 1.6 percent to 3,760 homes.
However, Paul Habibi, a professor of real estate at the UCLA Anderson School of Management, considers the market to be still artificially stimulated by the government, including higher Federal Housing Administration mortgage loan guarantees.
“The government stimuluses, in a sense, have created this artificial bridge under housing prices so that they can’t reach their equilibrium,” said Habibi. “A lot of what we’re seeing is bouncing along the bottom.”
Year over year, the median home price countywide was up 2 percent, while sales were off 14 percent.
As indication that the market has yet to reach an equilibrium, Habibi noted that in September there was a 10.5-month supply of homes on the market nationwide, above the five- to six-month level considered healthy.
In Los Angeles County, the supply was at 6.2 months in September, a significant jump from the 4.3 months of inventory tallied in August, according to the most recent available data from the California Association of Realtors.
Broker Kris Mooney, manager of the Santa Monica office of Coldwell Banker Previews, noted that the Westside market is holding up well despite the tumult elsewhere.
“Our properties are selling (at) 95 percent of their list price, which is probably not well known as a lot of people are selling at big discounts,” she said. “It’s outperforming the other markets and the inventory is low.”
In the condominium market, the median price remained at $300,000 for a third consecutive month, while sales dropped from 1,325 in September to 1,311 last month. Year over year, the price was down 2 percent while sales fell 19 percent.
