Southern California Home Prices Fall In August

   New data from DataQuick suggests the housing market is starting to roll over just months after the expiration of the homebuyer's tax credit.  Some excerpts from the DataQuick report which covers the Southern California area:

Home Prices
The median price paid for a Southland home fell last month to $288,000, down 2.4 percent from $295,000 in July but up 4.7 percent from $275,000 in August 2009. The median has declined on a month-to-month basis for the past three months, since hitting a high for this year of $305,000 in May.
Home Sales
Last month’s sales were the lowest for the month of August since 2007, when 17,755 homes sold, and the second-lowest since August 1992, when 16,379 sold. Last month’s sales were 31.5 percent lower than the August average of 27,070 sales since 1988, when DataQuick’s statistics begin. The average change in sales between July and August is a gain of 3.9 percent, compared with last month’s 2.1 percent decline from July.
Last month, foreclosure resales – homes that had been foreclosed on in the prior 12 months – accounted for 34.7 percent of the resale market, up from 34.2 percent in July but down from 41.7 percent a year ago. The all-time high was February 2009 at 56.7 percent, DataQuick reported.
These depressing numbers will no doubt renew calls for more government stimulus. Maybe another homebuyer's tax credit which is bigger and better than the last one. Perhaps the Fed could manipulate mortgage rates down to 1%. Or maybe we could just let the housing market heal itself through lower prices. Small chance of this occuring because it is not politically acceptable. Oh well QE 2, 3, and 4 are on the way.

Black Swan Insights


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