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County Home Sales, Prices Up, But Gains May be Short-lived

County’s unemployment rate was also up in December.

By EGP Wire Service


A real estate information service reported last week that home sales in Los Angeles County rose by 31.3 percent in December, compared to the same month a year ago, while prices increased by 5.9 percent. Some analysts fear, however, that rising unemployment and credit tightening by some lenders, may wipe out hopes for sustained gains.

A total of 7,679 homes sold in December, up from 5,848 for December 2008, while the median price of a home in Los Angeles County last month was $339,000, up from $320,000 in the same month a year ago, according to La Jolla-based MDA DataQuick.
Several forces have pulled the region’s median sale price out of its nose dive and given it lift,” said John Walsh, MDA DataQuick president.

“We’ve seen the re-selling of foreclosed homes fall off its peak in newer, lower-cost inland areas, while at the same time sales have started to pick up in some of the more established expensive areas.”

Other industry observers have cited the $8,000 federal tax break for first time homebuyers that expires in April, as another reason for stepped-up buying.

Some real estate experts, however, are saying the upward trend may be stalled now that the FHA, which finances a large percentage of loans taken out by first-time, lower-income homebuyers, many with lower credit scores, has announced that it will tighten lending requirements and raise fees as a tool to strengthen its loan portfolio and lower lending risk.

Speculation is also growing that China may soon cut back on credit, which may in turn lead to higher inflation and interest rates.
Adding to the pressure in the market is the increase in County’s unemployment rate, which grew to 12.4 percent in December, up from a revised 12.2 percent in November, and 9.2 percent in December 2008, according to the state Economic Development Department on Jan. 22. The comparable estimates for the nation were 10 percent in December, 10 percent in November and 7.4 percent for December 2008.

The professional and business services sectors posted the largest job losses over the month, down by 5,000 jobs.

A total of 603,000 people were unemployed in December in Los Angeles County, which has a labor force of about 4.9 million.
The median price of a Southern California home was $289,000 in December, up 1.4 percent from $285,000 in November and up 4 percent from $278,000 in December 2008.

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January 28, 2010  Copyright © 2010 Eastern Group Publications, Inc.

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