Southern California Home Prices Appear to Stabilize

The median price paid for all homes in six Southern California counties in September — $275,000 — was unchanged from August and 11% below the same month last year, according to San Diego-based MDA DataQuick.

As reported in the Los Angeles Times, “Christopher Thornberg, a Los Angeles economist who was an early predictor of the housing bubble, said several factors converged last month to give home sales a boost. “Tax breaks, low interest rates and pent-up demand added up to create a surge in sales that’s surely gone some way in stabilizing prices,” he said.. . Even if the housing market takes another hit in the coming months, Thornberg said, the bulk of the market correction is past.”

“The Southern California median price remains at 2002 levels, even without considering inflation, and is 46% below its peak level of $505,000 set in several months of 2007.Those relatively low prices pushed the number of homes sold in September up 5% over the same month last year, and 0.2% above August.

Last month’s sales, with a rising median price over last year in some areas, show the mix of homes sold is normalizing. Sales of homes priced at or above $500,000 were 21% of the total, up from 13% in January, DataQuick said.”

Sales have benefited from very low interest rates, reduced home prices, as well as government incentives including the $8,000 first time home buyers Federal Income Tax credit which is scheduled to expire on November 30th, 2009.