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September's median for L.A. County plunged to $380,000 from $404,000 the previous month, according to HomeData Corp., which supplies data to the Business Journal. The research firm Dataquick, which is the widely accepted source for real estate statistics, should be out with its own numbers in a few days, but these results would suggest a continued downward pull on prices. That's what happens when much of the sales activity involves foreclosed properties (roughly a third of all sales in the county). Based on the HomeData numbers, home prices haven't been this low since early 2004. Meanwhile, home sales were up 22 percent from August, again reflecting the foreclosure activity. So who are buying homes these days? I'm told it's a grab bag, from first-timers who got shut out of the real estate boom a few years back to investors who will either resell the properties or rent them out until the market gets better. From the Business Journal:
Jimmy Spathos, a real estate agent who has been selling homes in Downey for nine years, said more first-time buyers are bypassing banks to secure a loan and instead are getting funding from the Federal Housing Administration. Spathos said these first-time buyers are qualifying for FHA mortgages, which are insured by the government and require only a 3 percent down payment. As a result, the buyers are entering markets like Downey, where the median home price dropped to $354,000 in one ZIP code. “The majority are first-time home buyers,” Spathos said. “They are buyers who are out and are serious buyers.”
By the way, the Guardian's blog editor, Kevin Anderson, dropped by the LABO offices last week to talk about the Socal economy, especially real estate. Here's the link. Kevin spends a lot of time in the U.S. writing about technology, politics and media.
Mark Lacter created the LA Biz Observed blog in 2006. He posted
until the day before his death on Nov. 13, 2013.