Housing Market in L.A., San Diego Counties Keeps Slowing

LOS ANGELES, September 15, 2006 -- The once-high flying housing market kept slowing in August in two key Southern California counties, as sales eroded and prices lagged compared to a year ago, a real estate research firm said.

Data released Wednesday for Los Angeles and San Diego counties suggested a price correction was under way in the markets that had attracted bidding wars in recent years, said Andrew LePage, an analyst with DataQuick Information Systems.

"We're not sure at what point demand will respond and start to pick up again," he said.

In Los Angeles County, home prices rose in August at the lowest annual rate in six years. In San Diego County, prices declined 2.2 percent compared to the year-ago figure, the data showed.

Figures for other California counties were due next week.

Last month, 9,193 homes were sold in Los Angeles County, a 21 percent drop from the same time last year and the fewest for the month of August since 1997. It was the county's ninth straight month of plunging year-over-year sales.

Meanwhile, the median price in the county increased 4.7 percent in August to $517,000, the data showed.

The situation was worse in San Diego County, where the median price of a home dropped to $482,000, the same level as April 2005. The county also saw a 32 percent decline in sales compared to a year ago.

Analysts said the drop in sales could bottom out by the middle of next year and make a gradual recovery by late 2008.

"It will take a year or two to work itself out," said Alan Gin, a University of San Diego professor and associate at its Burnham-Moores Center for Real Estate.

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