Explaining Southern California's economy

No room for optimism about SoCal housing market

KPCC's business commentator and LABiz blogger Mark Lacter takes a look at the SoCal housing markets, checking in with the DataQuick numbers. What we notice is that August sales volume was up from August of last year, but sales prices are down. Here's DataQuick's analysis:

The region’s overall median sale price is suppressed somewhat by abnormally low sales of newly built homes, which typically sell for more than resale homes. Southland builders sold 1,184 new houses and condos last month, down 14.3 percent from a year earlier and the lowest new-home tally for an August in DataQuick’s records back to 1988.

But despite that, what's worrying is that price deflation still seems to be a major factor in the regional housing market. These numbers jumped out at me:

The typical monthly mortgage payment that Southland buyers committed themselves to paying was $1,101 last month, down 4.6 percent from $1,154 in July and down 4.9 percent from $1,158 in August 2010. Adjusted for inflation, current payments are 52.5 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 61.1 percent below the current cycle’s peak in July 2007.