The once-sizzling Los Angeles County housing market continued cooling down in August, posting significant declines in the number of house and condo sales.
In all, 8,246 existing homes changed hands in the county in August, which was a steep 32 percent drop from the same month last year.
However, the median price continued climbing. The $550,000 median price of existing homes that sold in August was up 5.8 percent from one year earlier. It was the same price as the previous month of July.
That pattern has held consistent for much of this year: Unit sales have been sliding but median prices climbing.
August is the first month the Business Journal has listed condo sales in the county.
The number of condo sales fell 30 percent to 1,933 the lowest number for August in at least three years. At the same time, the median condo price rose almost 4 percent to $415,000 the highest median price for August in at least three years, according to data provided to the Business Journal by HomeData Corp., a Melville, N.Y., company that tracks housing prices nationwide.
However, the median condo price has fallen the last two months after peaking in June at $422,000.
Several real estate professionals said that this data, coupled with the similar drop in volume but increase in median price for homes, indicates that the county's real estate market continues to soften.
"We are coming through a cycle that was extremely hot and everything was going up at incredibly high paces so it would seem natural that it would slow down at some point and adjust," said Ron Harris, vice president of investments at Marcus & Millichap Real Estate Investment Brokerage Co.
"These numbers indicate a flattening or softening of the market you are seeing corrections in the market but it hasn't affected value in the same way."
Some real estate economists said that house and condo prices could slip, citing the psychology of buyers in a cooling market as a key factor.
"I wouldn't be surprised to see several months of price declines," said Lawrence Yun, senior economist with the National Association of Realtors. "People understand the market is cooling, and some potential buyers may be holding back to see how far declines go. I don't see prices declining in the long term."
Yun said that the county's strong job market over 70,000 jobs were created in the last year is one factor that will support the real estate market and help to stave off long-term price declines.
Excluding January, which saw a sales volume increase for condos, the year had seen decreases in unit sales between 5 and 23 percent. But in July and August, condo sales dropped in the 30 percent range.
Now, experts see some condo gluts in spots.
Downtown Los Angeles, one of the county's most active condo markets, saw August sales drop in several areas. In the 90012 ZIP code, August sales were down 44 percent to 14 condos sold. At the same time, the median price rose 34 percent from last year to $602,000.
Robert Kleinhenz, deputy chief economist for the California Association of Realtors, said that an abundance of new condos coming onto the downtown market is affecting sales volume, a trend he also sees in the Long Beach condo market.
In downtown Long Beach's 90802 ZIP code, August sales were down 43 percent to 48 condos sold, with the median price up almost 7 percent to $347,000.
"Downtown Los Angeles and downtown Long Beach are facing similar challenges," Kleinhenz said.
The California Association of Realtors estimates that as of July, condos in Los Angeles County were staying on the market a median 38.1 days, compared to 19.1 days a year ago. That translates into a build up of county inventory levels. Kleinhenz said a higher condo inventory translates into "prices leveling off or going down a bit."
Lynn Borland, president of high-end property real estate firm Wilshire Realty, said that while sales are down, luxury condos are outperforming the "general market correction."
One of the company's properties, the 23-story Californian on Wilshire, opened in July with all 74 condo units pre-sold. The property is located in Westwood, where August sales dropped 22 percent to 21 condos sold, with the median price down 8 percent to $540,000.
Another of the company's properties, Cove in Marina del Rey, is slated to open later this year and the company has sold 131 out of 138 condos there. Borland said that about 30 percent of those pre-sales were done during the current market cool down. In Marina del Rey, August sales dropped 46 percent to 14 condos sold, with the median price up less than 1 percent to $747,000.
"The downtown market and Westside are very strong," said Harris, who has sold several large condo properties in the last year. "There are certain markets in Los Angeles that seem to be softer in buyer demand right now."
As for houses, such high-end areas as Beverly Hills, Santa Monica and Playa del Rey, saw price drops in August.
In the Beverly Hills 90210 ZIP code, August sales dropped 74 percent to 11 homes sold, with the median price down 50 percent to $1.2 million.
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