For the first time in roughly two years, home sales in Southern California dropped in April. MDA DataQuick, in San Diego, reported all home sales within the six-county region plummeted to about 20,300. This ended a 21-month streak of year-over-year increases. The sales also sank nearly 1% from March.
It was speculated sales may have dropped as buyers waited for May to close escrow and seize the opportunity of a new state tax credit. As well, the sales may have dwindled due to the disappearance of low-cost foreclosures within SoCal’s inland communities. Foreclosures, interestingly, made up nearly 36% of re-sales last month—it was roughly 54% in April, 2009. Last year, lower-priced foreclosures were plentiful; their absence now, has consequently, affected the market.
DataQuick also reported a rising median home price in Southern California. Last month, it was $285,000, a 15% jump from last April’s $247,000. John Walsh, President of DataQuick, said, “It’s unclear which of today’s sales characteristics are part of a new reality and which are still temporary turbulence…the market’s still taking baby steps on a long road to recovery, trying to find its footing.”
Some point to borrowers’ too-often inability to obtain credit as another factor in decreased home sales. This, in combination with rising median home prices, makes it easier to understand the shift or rather, drop in home sales in Southern California. On the other hand, according to DataQuick, price increases have showed most buyers have yet to lose equity in their homes.