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SoCal home sales drop 13.8 percent in August

September 14, 2010 12:00:00 AM PDT
Home shoppers seem to have lost interest in buying. The economy, the job market, and getting a loan are just some of the reasons home sales continue to drop. And now renting is at the top of would-be buyers' list.Home sales in Southern California fell 13.8 percent last month to mark the slowest August in three years. The number of sales last month was the second lowest since 1992. People are just not buying.

San Diego-based MDA DataQuick said 18,541 homes sold in the six-county region last month, compared with 21,502 in August 2009. Sales reached the lowest level for the month of August since 2007, but the decline was not as severe as the 20.6 percent year-over-year drop in July.

August's sales were also down 2.1 percent from 18,946 in July.

DataQuick also said the median home in August of $288,000 climbed only 4.7 percent from $275,000 in August 2009, its slimmest gain in a string of year-to-year increases that began in December.

Last month's median price also fell 2.4 percent from $295,000 in July, its third consecutive month-to-month drop.

Home prices in L.A., Ventura and Orange counties were relatively flat or worse. However, Riverside and San Bernardino counties saw some pretty good increases. Of course, they had fallen the most too.

Instead rental agencies, like Westside Rentals, are seeing their numbers rise as home shoppers are keeping their wallets in their pockets.

"We're seeing a definite increase right not. A lot of people [are] choosing to rent rather than buy," said Mark Verge, owner of Westside Rentals.

Verge says his clients tell him it's just not a good time to buy just yet.

"Me and my fiancé, we've been looking to buy for a while and we're choosing to hold off until we see where this economy settles out. Renting right now, to us, is worth it. It's a lot better right now to rent, I think," said L.A. resident Jack Manos.

And even if a renter has the money, they prefer not owning for various reasons.

"What I like about a rental is I'm not responsible for the plumbing, the insurance, I'm not responsible for taxes, I have the freedom to leave if it doesn't work out," said Tarzana resident Diana Tracy.

And it's a good time to rent because landlords are hit by the economy too.

"Too many owners ran into this problem where they'd raise their prices to these ridiculous levels, lose the tenants and now they have a vacant building and they want to get this number back. And now they find that there's really a balance, it's got to be fair for both sides," said Verge.

The Associated Press contributed to this report.

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