Southern California home prices tumble in November

By Jim Christie

SAN FRANCISCO (Reuters) - November home sales in Southern California posted a two-decade low for the month, while the median home price fell 10.3 percent from a year earlier, a record year-over-year decline, a report released on Tuesday said.

The number of homes sold in the region in November fell 42.7 percent from a year earlier, although the total sales of 13,173 new and resale houses and condominiums marked a 2 percent increase from October, according to the report by DataQuick Information Systems.

The Southern California region comprises Los Angeles, Orange, San Diego, Riverside, San Bernardino and Ventura counties.

DataQuick, a real estate information service based in La Jolla, California, said last month's home sales tally was the lowest for Southern California for any November in its records, which date to 1988.

The median price paid for a home in Southern California in November was $435,000, down 10.3 percent from a year earlier year and down 2.2 percent from October.

"That year-over-year decline is the largest for any month in DataQuick's records. Last month's $435,000 median was the lowest since March 2005, when it was also $435,000," DataQuick said.

San Diego real estate consultant Tim Sullivan predicted further price declines in the region as individual sellers follow the example of struggling home builders and lower asking prices to entice prospective buyers, who are in no hurry.

"I think we still have some movement downward in prices," said Sullivan, president of Sullivan Group Real Estate Adivsors. "We've been seeing it in the new-home market and I think we're just starting to see it in the resale market."

Prices are also coming down as the inventory of homes for sale increase -- in many areas because of foreclosures.

Some Southern California housing markets are among the hardest hit in the nation by high levels of foreclosures because many recent home buyers are unable to meet rising payments on adjustable-rate mortgages as interest rates reset at high levels. Because home prices are declining, lenders will not extend credit to refinance mortgages.

Additionally, DataQuick's report said that new home buyers in Southern California are having a much harder time securing first mortgages as the local surge in mortgage defaults and foreclosures is making lenders nervous.

Southern California home sales financed with conforming loans, or mortgages up to $417,000, last month declined 31.2 percent from a year earlier. Sales backed by jumbo mortgages, or loans for $417,000 or more, fell 69.3 percent over the same period.

"Right now the reaction of the financial community is hypersensitive," Sullivan said.

"The underlying requirements are so onerous right now, it's such a pain that people are backing off," he added.

The credit crunch, falling home sales and declining home prices are gripping the region's housing market as state and U.S. officials work to encourage lenders to adopt loan modification programs to help some distressed borrowers. The programs would freeze interest rates on mortgages to prevent defaults and foreclosures.

(Editing by Leslie Adler)