Home Prices Dropping at Record Rate

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Southern California home prices continued to fall at a record pace in February, and are now at 2004 levels, a real estate information service reported today, the Los Angeles Times reports.


The median price for a Southland home last month was $408,000, down 17.6% from a year ago, according to DataQuick Information Systems. Area home prices have now fallen 19% on average from their peaks last year.The steep price declines are putting many more homeowners “upside down” — owing more on their homes than their homes are worth. Forecasters say foreclosures will likely continue to rise and prices will fall further.


About one-third of Southern California homes sold in February had been foreclosed since January 2007, according to DataQuick. A year earlier, previously foreclosed homes accounted for 3.5% of sales.


Since September, each month’s sales totals have been the lowest for comparable months since 1988, DataQuick said.


The rapid pace of the decline has led Los Angeles economist Christopher Thornberg, who last year predicted a 20% decline in Southern California home prices, to revise his projection. He now thinks prices will fall 40%.


In the last real estate bust, Southern California home prices dropped 19% between 1991 and 1997, according to DataQuick.


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