Stunning drop in home sales

L.A. sales in May tumbled 31 percent from a year earlier, part of a 34.4 percent collapse for all of Southern California. It's the worst May in 12 years, according to DataQuick Information. And yet the median price of an L.A. County home (new and existing) rose almost 7 percent, to $550,000. As we've noted before, it's a case of very limited demand on the low end (subprime problems no doubt taking a toll) and heavy demand on the high side - so heavy that some properties are being snapped up at above the asking price. "Sales have been dropping now for the last 20 months," said Marshall Prentice, DataQuick president. "The first part of that was just coming off the frenzy of 2004 and 2005 and didn't put that much downward pressure on prices. The sales declines of the last half year, though, will have more of an effect on prices. It's remarkable they haven't come down more than they have." Some other tidbits from the DataQuick report: Financing with adjustable-rate mortgages is down sharply, foreclosure activity is high (though it hasn't been a drag on prices in most markets), down payment sizes are stable and flipping is down.

HOME SALES (May '07 vs. May '06)
Los Angeles -30.7%
Orange -28.9%
Riverside -45.4% $420,000 $406,000 -3.3%
San Bernardino -46.5%
San Diego -24.4%
Ventura -24.8%

MEDIAN HOME PRICE (May '07 vs. May '06)
Los Angeles $550,000 +6.8%
Orange $635,000 +0.1%
Riverside $406,000 -3.3%
San Bernardino $361,750 +0.5%
San Diego $492,000 -1.6%
Ventura $590,000 -1.6%

Source: DataQuick Information Systems, DQNews.com