Southern California Home Prices Drop in May
Associated Press
By Jacob Adelman
Southern California's median home price saw its largest year-to-year drop in 20 months in May, as buyer uncertainty, tight credit and lackluster hiring restrained housing demand, a tracking firm said Monday.
...Richard Green, who directs the University of Southern California's Lusk Center for Real Estate, said sales were being depressed by the apparent scarcity of financing for mid-to-high-priced homes.
Transactions below $200,000 made up 30.6 percent of last month's deals, up from 26.8 percent a year earlier, while sales between $300,000 and $800,000 accounted for 38.9 percent of all deals, down from 44.4 percent a year earlier, DataQuick said.
The higher-end sales were being held up because banks remained reluctant to extend loans that are too high to be resold to Fannie Mae and Freddie Mac, the government-supported companies that buy home loans from lenders and package them into bonds with a guarantee against default, Green said.
"The less expensive housing is selling," he said. "But everything else is just sitting there."