SoCal home sales jump on reduced prices

The sharp reduction in housing prices over the past year seems to have finally impacted both the psychology and the willingness of buyers to re-enter the marketplace. Although one month does not make a trend, it's the first piece of good news we've seen here in Southern California for awhile. From an L.A. Times story:

Southern California home sales rose last month for the first time in nearly three years, although prices continued their downward spiral, data released today showed...

The ongoing decline in prices appears to be spurring sales. The number of homes sold picked up in July for the first year-over-year expansion since October 2005. All counties, save Los Angeles County, posted at least a 10% increase from July 2007. The biggest gainer was the region's foreclosure nucleus -- Riverside County -- where sales jumped 48.6%.

Los Angeles County was the weak link for home sales. The region's biggest county posted an all-time July low of 6,592 sales, down 3.2% from a year ago. The median price, meanwhile, dropped 27% to $400,000.

Overall, 20,329 homes in the six-county region closed escrow last month, a 13.8% rise from a year ago...

There's no question that it's the purchase of the foreclosures that are driving local sales. Foreclosure resales in July composed 43.6% of all transactions, DataQuick reported.

The question now is, whether rising demand can counter the ongoing price descent.

July's numbers show that, although still slow, the pace of Southern California home sales may have found a floor. Each calendar month from September 2007 through June was an all-time sales low, but last month's sales number, while still below the 20-year average, wasn't the worst showing for a July.