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Southern California Home Sales Plummet 21% In July

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LOS ANGELES — Home sales in Southern California plummeted 21.4 percent last month for the largest year-over-year drop in more than two years, a tracking firm reported Tuesday, suggesting the market isn't ready to stand on its own without the help of federal tax credits.

San Diego-based MDA DataQuick said the six-county region saw 18,946 sales last month, compared with 24,104 in July 2009. Sales fell 20.6 percent from 23,871 in June, the firm said.

DataQuick said last month was the slowest July since 2007, when 17,867 homes were sold. July's year-over-year decline also was the steepest drop since March 2008, when the newly frozen credit market prompted a sales decline of 41.4 percent.

"It appears some of the sales that normally would have occurred in July were instead tugged into June or even May as buyers tried to take advantage of the expiring tax credits," DataQuick President John Walsh said.

The median home price in Southern California declined 1.7 percent to $295,000 last month from $300,000 in June, its second consecutive month-to-month decline.

However, the median price last month rose 10.1 percent from $268,000 in July 2009, and up 19.4 percent from the current cycle's low of $247,000 in April 2009.

John Husing, an economist with San Bernardino County-based Economics & Politics Inc., said those increases showed prices were on an upward trajectory, although a shaky one.

"The fundamental force of the numbers is in the right direction," he said. "But it's going to be like this: It's going to go up a little bit and down a little bit."

DataQuick spokesman Andrew LePage said he expected prices to continue rising, but drastic increases like the ones seen earlier this year when buyers first returned to higher-end markets were unlikely to be seen again any time soon.

"If consumer confidence stays low and there not much progress on the jobs front, its really going to be difficult to beat the year-ago numbers buy much," he said.

Foreclosures comprised 34.2 percent of resales last month, up from 32.8 percent in June but down from 43.4 percent a year ago.

Husing said the continuing availability of foreclosure properties and other low-priced homes would be enough to attract buyers without the expired tax credits, if the general economy improves.

"What's inhibiting people from taking advantage of it? Fear," he said. "They don't even know if they're going to keep their jobs."

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