Southern California home sales dive as buyers exit

A house for sale is seen in Antioch, California November 27, 2007. Home sales in Southern California sank to their lowest in nearly two decades in December as buyers were sidelined or dropped out of the market because they could not obtain mortgages, according to a report released on Tuesday.

SAN FRANCISCO (Reuters) - Home sales in Southern California sank to their lowest in nearly two decades in December as buyers were sidelined or dropped out of the market because they could not obtain mortgages, according to a report released on Tuesday.

A total of 13,240 new and resale houses and condominiums were sold in Southern California last month, up 0.5 percent from November and down 45.3 percent from a year earlier, according to the DataQuick Information Systems report.

"Last month's sales were by far the lowest for any December in DataQuick's statistics, which go back to 1988," the real estate information service firm said of its findings for California's most populous region, which it defines as Los Angeles, Orange, San Diego, Riverside, San Bernardino and Ventura counties.

"The sales count was 23.5 percent below the previous December low of 17,272 in 1990," the report by La Jolla, California-based DataQuick added.

Anxiety among buyers and difficulty in obtaining so-called jumbo mortgages, or loans for more than $417,000, continued to weigh on the pricey regional housing market's sales, particularly of higher-priced homes, according to DataQuick.

Home sales in the region, one of the hottest U.S. residential property markets during the recent housing boom, have been declining from year-earlier levels since October 2005.

The median price paid for a home in the region last month was $425,000, its lowest level in nearly three years and down 2.4 percent from November and 13.3 percent from a year earlier. Prices have fallen 15.8 percent from the peak during the spring and summer.

Jumbo mortgages were used to finance about 22 percent of home sales in Southern California last month, down from nearly 40 percent before the credit crunch began in August, DataQuick said.

"It looks like anybody who can is waiting this thing out," said Marshall Prentice, DataQuick's president.

Home buyers firmly expect the region's home prices to fall further as recession fears build, said Tim Sullivan, president of Sullivan Group Real Estate Advisors, a San Diego-headquartered real estate consulting firm.

"It's not even anxiety. It's disbelief," Sullivan said. "Buyers aren't believing in the market so they're sitting still ... There's no confidence in the market, where there was unbridled confidence in the market in 2004 and 2005."

Home sales fell the most in Southern California last month in San Bernardino County -- down 54.8 percent from a year earlier. Many homes in the county were purchased in recent years by subprime borrowers with patchy credit who took on risky adjustable-rate mortgages, and now the area is among the hardest hit in terms of foreclosures.

Rates on the loans have been adjusting upward, making monthly mortgage payments too expensive for many borrowers.

Prices in neighboring Riverside County posted the region's biggest drop in December from a year earlier, down 17.8 percent to $355,000.

Riverside County is also suffering a surge in foreclosures stemming from rising mortgage rates.

(Editing by Tom Hals)