http://www.dqnews.com/Articles/2010/News/California/Southern-CA/RRSCA100914.aspx

Southern California Home Sales Fall in August; Median Price Dips
September 14, 2010
La Jolla, CA—Southland home sales fell last month to the lowest level for an August in three years and the second-lowest in 18, the result of a worrisome job market and a lost sense of urgency among home shoppers. The median price paid remained higher than a year ago but continued to erode on a month-to-month basis, a real estate information service reported.

A total of 18,541 new and resale houses and condos closed escrow last month in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. That was down 2.1 percent from 18,946 sales in July, and down 13.8 percent from 21,502 sales in August 2009, according to MDA DataQuick of San Diego.

Last month’s sales didn’t fall as sharply as in July, when the market lost most of the boost that had been provided by federal home buyer tax credits. July sales fell 20.6 percent from June and fell 21.4 percent from a year earlier. The now-expired credits spurred many buyers to purchase homes sooner than they otherwise would have, creating a market lull in their wake.

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.

“The loss of home buyer tax credits explains much of the sales weakness over the past two months. But other factors are suppressing sales, too, such as the lack of meaningful job growth and potential buyers’ concerns about job security. Also, for many out home shopping now, there’s little beyond ultra-low mortgage rates to pressure them to buy sooner rather than later, especially in areas where the number of homes for sale is climbing,” said John Walsh, MDA DataQuick president.

“Over the next couple of months it will be interesting to see how many home shoppers opt for the sure thing, a spectacularly low mortgage rate, and how many hold off in hopes prices fall significantly. The latter group will have to keep a close eye on rates. If they jump much it could wipe out the advantage of a modest price drop.”

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.

http://www.reoi.com/news/housing-inventory-up-in-august-as-prices-go-down-altos

Housing inventory up in August as prices go down: Altos
Asking prices for houses are dropping in major metropolitan markets, but buyers aren’t snatching up homes, so inventory is continuing to increase, according to the Altos Research.

The Altos 10-city composite of current home listing prices decreased 1.06% from July to August. The average asking price of single family homes in Boston, Chicago, New York, Los Angeles, San Diego, San Francisco, Miami, Las Vegas, Washington, D.C. and Denver was $469,910, down 1.68% from the June reading.

In May, the 10-city composite increased for the first time in nine months. The 10-city composite median price bottomed out at $470,017 in January 2009. The composite gradually increased to $509,030 in July 2009, before the nine-month-long run of declines. But prices have since started to decrease again.

In all 26 markets that Altos tracks housing data, prices fell month-over-month. The biggest asking price declines were in Phoenix (5.06%), Miami (3.11%), and Dallas (2.40%). The smallest declines were in San Diego (.03%), Washington, D.C. (0.2%) and Austin, Texas (0.42%).

While inventory continues to rise, it’s at a slower pace. While Altos said buyers aren’t buying, the slowing inventory increases may be due to sellers pulling their properties off the market, or not listing them in the first place.

There were 296,074 housing listings in August, up 0.33% from 311,742 in July and up 2.09% from 304,841 in June. Houston had the biggest monthly increase in listings, up 4.87% to 40,266, followed by Las Vegas (3.74%) and Los Angeles (3.41%). Inventory decreased the most in Austin, Texas (8.01%), Washington, D.C. (3.74%) and Seattle (1.81%).

http://www.reuters.com/article/idUSTRE6823TF20100915

More sellers cut U.S. home prices for 3rd month

More U.S. homeowners slashed their asking prices for a third straight month in August to lure buyers into a market hindered by high unemployment, a study showed on Wednesday.

Owners cut prices on 26 percent of homes for sale last month, up from 25 percent in July and the highest since a matching 26 percent in October 2009, real estate website Trulia.com said.

Lingering job market weakness, a hefty supply of foreclosed homes and soft demand after the homebuyer tax credit ended in April kept buyers in the driver’s seat in many markets.

“Nationwide, sellers continue to slash prices and this is a worrisome trend,” said Pete Flint, Trulia’s chief executive. “However, we’re seeing gradual improvement in many U.S. cities — several for consecutive months.”

Homeowners in some areas still grapple with pricing realistically for a housing market that faces many hurdles and a snail’s-pace recovery, according to Trulia.

The average home price reduction in August stayed at 10 percent, or $33,892, Trulia found.

Sellers nationally slashed more than $29 billion from houses on the market as of September 1, down from $30.1 billion the prior month but up from $27.3 billion two months earlier.

During a rush to buy homes this spring before the tax credit ended, sellers cut prices by $22.8 billion in March and $25 billion in April, according to Trulia.

The percentage of owners cutting prices held steady or fell in 24 of the 50 largest cities, an improvement from 16 cities in July.

“What this shows us is that while we’re in for a long climb to bring stability back to the housing market and while it’s going to take time, that climb appears to at least be underway in some parts of the country,” Flint said. “When we see job growth across America, we can begin to discuss stability in the housing market.”

http://www.time.com/time/business/article/0,8599,2013684,00.html

The Case Against Homeownership

Homeownership has let us down. For generations, Americans believed that owning a home was an axiomatic good. Our political leaders hammered home the point. Herbert Hoover argued that homeownership could “change the very physical, mental and moral fiber of one’s own children.” Franklin Roosevelt held that a country of homeowners was “unconquerable.” Homeownership could even, in the words of George H.W. Bush’s Secretary of Housing and Urban Development (HUD), Jack Kemp, “save babies, save children, save families and save America.” A house with a front lawn and a picket fence wasn’t just a nice place to live or a risk-free investment; it was a way to transform a nation.

Houses owned by the people who lived in them, we believed, created social and financial stability — more-involved citizens, safer neighborhoods, kids who did better in school. No wonder leaders of all political stripes wanted to spend more than $100 billion a year on subsidies and tax breaks to encourage people to buy.

But our leaders, with our encouragement, went much too far. The dark side of homeownership is now all too apparent: foreclosures and walkaways, neighborhoods plagued by abandoned properties and plummeting home values, a nation in which families have $6 trillion less in housing wealth than they did just three years ago. Indeed, easy lending stimulated by the cult of homeownership may have triggered the financial crisis and led directly to its biggest bailout, that of Fannie Mae and Freddie Mac. Housing remains a drag on the economy. Existing-home sales in July dropped 27% from the prior month, exacerbating fears of a double-dip recession and accelerating the accompanying slide in stock that took the Dow Jones industrial average to a seven-week low. And all that is just the obvious tale of a housing bubble and what happened when it popped. The real story is deeper and darker still.

For the better part of a century, politics, industry and culture aligned to create a fetish of the idea of buying a house. Homeownership has done plenty of good over the decades; it has provided stability to tens of millions of families and anchored a labor-intensive sector of the economy. Yet by idealizing the act of buying a home, we have ignored the downsides. In the bubble years, lending standards slipped dramatically, allowing many Americans to put far too much of their income into paying for their housing. And we ignored longer-term phenomena too. Homeownership contributed to the hollowing out of cities and kept renters out of the best neighborhoods. It fed America’s overuse of energy and oil. It made it more difficult for those who had lost a job to find another. Perhaps worst of all, it helped us become casually self-deceiving: by telling ourselves that homeownership was a pathway to wealth and stable communities and better test scores, we avoided dealing with these formidable issues head-on.