Southern California Home Prices Hit 4-Year Low

Southern California home prices plunged 24 percent last month, dropping the median home price to a four-year low. More than one-third of the homes bought in the region last month were foreclosure sales.

Copyright © 2008 NPR. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required.

RENEE MONTAGNE, host:

Housing prices are slipping across the country, but nowhere are they sliding as fast or as steeply as here in California. Specifically, here in Southern California, which holds the national record for the most foreclosures and the fastest depreciation. Here's NPR's Karen Grigsby Bates with more.

KAREN GRIGSBY BATES: The figures pretty much said it all. DataQuick Information services, a California public property database, released their numbers from March and they were not pretty. The median price of Southern California homes dropped 24 percent last month. Many Californians had gotten used to enjoying an average home value increase of 38 percent for the past 20 years. They're still trying to absorb the downturn.

Mr. ANDREW LEPAGE (DataQuick Analyst): Indeed prices don't always go up and as we've seen before in California, they can certainly come down.

BATES: That's Andrew LePage, a DataQuick analyst. LePage says the credit crunch that began with the meltdown of the subprime banking industry is one factor in the current housing slump. So is the fact that the so-called jumbo loans, loans above $417,000, have become harder to get until recently when the FHA raised the maximum for those loans, which are based on area home values. Then there's the record number of foreclosures depressing the value of other homes on the market. That's a lot of grim news, but LePage says there is a silver lining.

Mr. LEPAGE: A lot of people like to cast this as a very gloomy story, but the news just keeps getting brighter for first-time buyers.

BATES: LePage says making jumbo loans easier to secure might increase upper-end home sales, which could boost the median market.

Mr. LEPAGE: But they - you know, you could be back up to much closer to average levels and then you could see the median sale price climb pretty fast.

BATES: Of course, median is relative. In Southern California last month, the median house sale price was $385,000. The same time last year, it was a half million dollars.

Karen Grigsby Bates, NPR News.

Copyright © 2008 NPR. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to NPR. This transcript is provided for personal, noncommercial use only, pursuant to our Terms of Use. Any other use requires NPR's prior permission. Visit our permissions page for further information.

NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR's programming is the audio.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.