Home prices increase, sales drop

LOS ANGELES
February 28, 2006 12:49pm

The price of a home in California jumped 13.8 percent in January from a year earlier, but sales dropped by 24.1 percent, the California Association of Realtors says Tuesday.

The plummet in sales was blamed on an increase in interest rates for home mortgages and a drop in consumer confidence. The Realtors also noted that the number of sales in January 2006 had to compare with January 2005, which set a record.

"We expected January sales to fall below the record that was set in January 2005. The decrease was intensified by interest rates crossing the key psychological threshold of 6 percent in the last quarter of the year, and by weakness in consumer confidence due to the residual effects of Hurricane Katrina," says Vince Malta, president of the Los Angeles-based association in a written statement. "However, interest rates remain near their historic lows, and we expect sales activity to accelerate as we move into the traditional selling season."

The median price of an existing, single-family detached home in California during January 2006 was $551,300, a 13.8 percent increase over the $484,580 median for January 2005, according to CAR’s figures, which are based on its survey of more than 90 member Realtor associations. The figures do not include all types of sales.

The January 2006 median price increased 0.5 percent compared with December's $548,640 median price.

DataQuick Information Systems of La Jolla, which produces a separate, more inclusive, price survey, says the median price in California in January was $452,000. That was down 1.3 percent from $458,000 for December and up 13.0 percent from $400,000 for January a year ago.

DataQuick statistics are based on county records data rather than MLS information. DataQuick Information Systems is a subsidiary of Vancouver, B.C.-based MacDonald Dettwiler and Associates.

"The California real estate market is beginning to experience the soft landing that we expect to be the underlying dynamic driving the housing market this year," says CAR Vice President and Chief Economist Leslie Appleton-Young, in a statement. "The number of homes for sale has risen to a six-month supply, which will translate into a slower rate of price appreciation than we experienced in 2005."

If Central Valley real estate agents looked a little lean and hungry in January, it might because the sales pace was down 31.9 percent from December and down 23.9 percent from January of 2005.

Prices in the Central Valley also fell in January to a median of $347,070. That’s down 2.5 percent from December, but still up from a year earlier, by 13 percent.

In a separate report covering more localized statistics generated by the Realtors and DataQuick, 93.2 percent or 355 of 381 cities and communities showed an increase in their respective median home prices from a year ago.