Dramatic drop in California home prices

While Southern California home sales were 30 percent below average for the month of August, transactions were up 9.1 percent from a year ago, real estate information service DataQuick reported today. That's the only good news, however, as the area's median home price tumbled a record 34 percent year-over-year in August.

DataQuick reported that a total of 19,366 new and resale houses and condos closed escrow in Southern California last month, up from 17,755 a year ago but down 4.7 percent from 20,329 in July. In the last 12 months the median home price plunged from $500,000 to $330,000, roughly a five-year low.

Fueling the yearlong plunge in the Southland median sales price were "depreciation, a high concentration of sales made after or under the threat of foreclosure (mainly in inland markets), and a dramatic decline in homes financed with larger, so-called jumbo mortgages," according to DataQuick.

Before the credit crunch hit last year, nearly 40 percent of Southland sales were financed with loans over $417,000, compared with 15.6 percent of sales last month, DataQuick reported.

Foreclosure resales, which made up 45.5 percent of all Southland resales last month, up from 43.7 in July and 10 percent a year ago, were highest in Riverside County, at 65.2 percent of resales, and lowest in Orange County, at 33.4 percent.

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