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UPDATE 2-So. California home sales jump 67 pct, prices sink

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SAN FRANCISCO, Nov 18 (Reuters) - Home sales in Southern California in October leapt 66.7 percent from a year earlier and 5 percent from the prior month as buyers jumped on deep discounts in prices, especially for foreclosed properties, MDA DataQuick said in a report released on Tuesday.

Foreclosures, which abound in some areas of Southern California such as Riverside and San Bernardino counties east of Los Angeles, accounted for half of all home resales in October in the most populous region of the most populous U.S. state, pulling the area’s median home price down to $300,000.

The median price tumbled 32.6 percent from a year earlier and 2.8 percent from September, the real estate information service said in its report.

A total of 21,532 new and resale houses and condominiums sold in the six-county region in October, the area’s highest monthly total this year, the report said.

“Fueled by lower prices, Southland sales have risen on a year-over-year basis for four consecutive months, breaking a 33-month streak of annual declines,” the report said. The median price was the lowest in 5-1/2 years for the region.

October home sales in many relatively affordable neighborhoods more than doubled from a year earlier thanks to a surge in loans insured by the Federal Housing Administration, which allows a down payment of as little as 3 percent.

They accounted for nearly one-third of all purchase loans in the region last month, compared with 2 percent a year earlier.

By contrast, use of larger “jumbo” mortgages common in higher-cost coastal neighborhoods remained well below normal levels.

“Before the credit crunch hit in August 2007, 40 percent of Southland sales were financed with jumbos, then defined as over $417,000. Last month just 13.1 percent of purchase loans were over $417,000,” the report said.

It would be premature to expect big gains in sales to continue given the state of the economy and efforts to keep foreclosures in check, MDA DataQuick analysts said.

“It tells us there were a lot of very serious buyers in the market during late summer and early fall -- buyers who consider housing a relatively good buy or investment,” said John Walsh, DataQuick’s president.

“Whether the worst of the housing correction is behind us will depend largely on the depths of this economic downturn, especially with regard to job losses. Also important will be the outcome of recently announced efforts to reverse the tide of foreclosures,” Walsh added.

Reporting by Jim Christie