Los Angeles County's once soaring housing market continued its descent in July toward what appears to be a bumpier landing than many had predicted. Sales volume took its biggest plunge yet this year and the median price dipped back to May's level.
The number of home sales fell 34 percent to 6,146 the lowest number for July in at least three years. The figure was even 15 percent below January, typically a slow month due to the holidays, according to data provided to the Business Journal by HomeData Corp., a Melville, N.Y. company that tracks housing prices nationwide.
At the same time, the countywide median price of homes that sold though 6.8 percent higher than a year ago fell to $550,000 from $555,000 in June. Real estate agents say rising interest rates and lackluster appreciation not only are making prospective buyers cautious, but many now appear to be holding out for bargains, anticipating that nervous sellers may be ready to slash asking prices.
"Nobody wants to make a wrong decision," said Syd Leibovitch, president of Rodeo Realty's Paramount Properties Division. "But while the market is flattening, it's certainly not going down."
Some real estate professionals anticipate sales will pick up later in the year, once the mortgage market absorbs the impact of successive Federal Reserve rate hikes, and if buyers on the sidelines come to believe that homes are unlikely to see the depreciations of the 1990s recession.
Of course, July's price drop from the previous month could be temporary such dips in the median price have been seen at least twice in the last 12 months. However, other data suggest the slowdown may not relent.
Until July, monthly sales volume this year had ranged 17 to 24 percent lower than 2005's historic levels. But compared to earlier months with scattered pockets of sales declines, parts of nearly every corner of the county saw sales drop by a third or more.
Even one of the county's most desirable suburbs, Calabasas, saw July sales drop 67 percent to 22 homes, with the median price down 7 percent to $1.2 million. Longtime Calabasas Realtor Heidi Adams, who had open houses at two $1 million-plus homes on the last Sunday of the month, said interest rate worries and decreased affordability have amplified her area's chronically tight inventory to depress sales volume.
Adams, a Coldwell Banker Realtors agent, said a tougher sales market elsewhere in the county also is having an impact. Most of her buyers come from the East San Fernando Valley or the Westside, and when it becomes harder to sell their current home in a more competitive market, it complicates a new purchase in her city.
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