Southern California Home Pricing in February

Another encouraging data point in the housing market came from the DQNews release of February housing data in Southern California. February represented the first month since I have been tracking the data (about 18 months now) where home prices were flat on a sequential basis. Obviously, one month does not make a trend, but this is certainly something to keep a watch over. From their peak, pricing has declined by 50.5% in Southern CA and 55.6% in the Bay Area. No doubt a lot of this decline is being driven by foreclosures, which accounted for 56.4% of sales in SoCal, but it is nice to see the market is actually starting to clear. Since September, year over year volumes have been up at least 25%, and in nearly all months over 50%.

In Riverside and San Bernardino (the two key locations in the badly decimated Inland Empire) prices are off 56% and 59.7% from their peak, though volumes have been up significantly in both regions (clearly, being driven by foreclosure activity).

The Wall Street Journal ("Home Buyers Stir Hope in California") wrote a nice piece confirming a lot of the positive data starting to show up in the numbers. The article gives several anecdotes where homes are starting to receive several bids – with many above asking. With home prices down 57% in CA, it is encouraging to see opportunistic buyers finally coming out of their shell.