Median home prices drop below 1989 levels in parts of Southern California
- Source: Xinhua
- [09:56 June 11 2009]
- Comments
Properties in several areas in Southern California are selling for less than they did 20 years ago, and that's not including inflation, according to figures published on Wednesday.
The median price in the six-county area was 247,000 dollars in April, about what it was in 2002. But in mainly desert communities such as the Antelope Valley and Inland Empire, median prices have fallen below levels recorded in April 1989, according to MDA DataQuick, a San Diego real estate information service.
Prices also tumbled below 1989 levels in neighborhoods in areas like Palmdale, Hemet, Barstow, Desert Hot Springs, Victorville, Highland, Santa Ana and Oxnard, DataQuick said.
That means thousands of homes in those neighborhoods -- even houses barely 20 years old and in decent shape -- have lost every dime of their appreciation, giving back not just the gains of the recent bubble but steady increases logged over a generation, said the agency.
The median price is the point at which half the homes sell for more and half for less.
Losing two decades' worth of gains in a single downturn "has never happened," said UCLA economist Edward Leamer, who has studied local areas during booms and busts. "You're seeing something that's abnormal."
What's abnormal this time is the easy credit that pumped up demand and inflated home prices in those communities to unprecedented highs, Leamer said in remarks published by the Los Angeles Times on Wednesday.
In some communities, foreclosures of houses, sold at cut-rate prices by banks eager to be rid of them, represent the bulk of the sales activity, according to ForeclosureRadar, an online seller of default data.
In the 1990s housing bust, "you had a foreclosure here, a foreclosure there. You did not have almost entire neighborhoods being foreclosed," Leamer said.
"In parts of Southern California, the housing crash has upended a basic tenet of the American dream: that home values always increase over the long term," the Los Angeles Times commented.