Southern California home sales plunged in July and show little signs of rebounding. And that, economists say, could stunt the region's economic growth.
Buyers scooped up 20,369 new and resale houses and condos in the six-county region last month, down 12.4% from a year earlier, research firm CoreLogic DataQuick said Wednesday. The sharp drop follows steady declines since October, as would-be buyers struggled to afford houses after prices surged last year.
The pain is especially acute for brokers, who depend on commissions.
"There are a lot of hurting agents right now," said South Bay agent Leo Nordine, who said his volumes have been roughly flat this year. "There are too many agents and not enough sales."
The steady declines come despite more homes on the market compared with last year. With prices sharply higher, there are simply fewer buyers able to afford them.
Changing demographics are also playing a role, experts said. Surveys show most young adults still want to own a home, but significant barriers exist for that large demographic group.
Others experts aren't so dour. Sales of previously owned homes, the largest segment of the market, have an economic impact, but a small one, said Richard Green, director of USC's Lusk Center for Real Estate. Housing's economic punch comes chiefly from new home construction, which demands legions of laborers and raw materials, he said.