Southern California home sales jumped 65 percent in September from a year ago, as plummeting prices fueled by foreclosures lured more buyers, a real estate tracking firm said Monday.
Last month's median home price in the six-county region fell 33.2 percent to $308,500, compared to $462,000 in September 2007, according to San Diego-based MDA DataQuick.
The September median price was 38.9 percent below the peak $505,000 median posted in spring and summer of last year.
John Husing, an economist with Economics & Politics Inc., a consulting firm, said the ample supply of discounted, foreclosed homes has kept downward pressure on prices.
Once foreclosures start drying up, prices will stabilize, but that could take another year, he said.
"The flow of foreclosures is enough to meet demand," he said.
Foreclosure resales amounted to half of all transactions last month, easily pushing sales beyond the dismal, record lows of a year ago, when a credit crunch began slamming the brakes on home financing.
"The pitifully low September 2007 sales numbers weren't tough to beat," said John Walsh, MDA DataQuick president.
Andrew LePage, an analyst with MDA DataQuick, said it's hard to estimate how many mortgage defaults were still in the pipeline. Some lenders are simply jammed with a backlog of paperwork, and the number of defaults by prime mortgage holders is increasing, he said.
The September sales figures largely reflect purchase decisions made during the summer, making it hard for analysts to predict how the recent meltdown in the financial markets will affect the housing market.
"The numbers don't reflect the sheer terror of the last three weeks," Husing said.
Tom Adams, a broker with Century 21 Adams & Barnes in Monrovia, a Los Angeles suburb, said the rocky stock market may have driven more people to real estate. He said his October sales have increased significantly.
"I think people may be seeing real estate as a safer investment than paper," he said.
Steep price declines, especially inland, could keep sales levels well above the record lows seen late last year and early this year, Walsh said. However, future sales will be affected by the severity of this economic downturn, he said.
The price drop is luring more first-time home buyers, but mortgages are hard to find, said Doug Shepherd, owner/broker of Coldwell Banker Shepherd Group in Riverside.
A total of 20,497 new and resale houses and condos closed escrow in the region last month, up 5.8 percent from 19,366 in August and up 64.6 percent from 12,455 in September 2007.
Last month's sales were the highest for any month since December 2006, and the year-over-year gain was the highest for any month in DataQuick's statistics, which go back to 1988.