| Home sales are dropping in Southern California. For the | | | | bubble at this point, this is just a return to more normal |
| fourth month in a row, home sales have continued to | | | | market conditions. What we have seen in the past |
| drop, according to data for March. At the same time, | | | | several years is abnormal market conditions. The rapid |
| the median price for a home in Southern California, has | | | | growth in the real estate market must eventually |
| climbed above the $500,000 mark. This is a | | | | return to a more normal pace. When we see the |
| divergence of trends. In the last several years home | | | | number of home sales slow, especially for a multi |
| sales were robust and increasing and so were home | | | | month period, we can expect prices to lag the |
| prices. Now home sales have slowed but prices are | | | | slowdown in sales by around three months. We should |
| still inching upward in many areas.Home values in Los | | | | see home appreciation start to really slow down soon |
| Angeles, Orange, Riverside, San Diego and Ventura | | | | in southern California.Inventory is another factor of |
| counties, increased 14% over one year ago. | | | | price. In this region inventory is increasing, but not at |
| Homeowners should not expect that rate of | | | | extraordinary levels. The time to sell a home is |
| appreciation for the current year. In March the number | | | | increasing. Last spring it was 27 days, now it is 48.The |
| of home sales fell almost 10%. Sales activity is related | | | | county to watch is San Diego. It was the first county |
| to price activity. The fact that we are seeing a | | | | to accelerate in home value appreciation and the first |
| continuing series of months with declining sales activity | | | | to slow. It is seen as a barometer for southern |
| is an indicator that price activity is soon to follow. The | | | | California. In the last six months median prices of |
| current rate of home value appreciation cannot be | | | | homes in San Diego county have decreased 2%. This |
| sustained in a climate of falling home sales. In Southern | | | | is not indicative of a bursting bubble, but an overheated |
| California the sales activity and the rate of price | | | | market that is returning to normal.Andrew Goldman is |
| increases reached a peak two years ago. In the | | | | president of Metal Rabbit media services, the operator |
| current environment we are likely to see home values | | | | of He has written a number of articles on finance and |
| rising at a much slower pace or even approaching | | | | investment over the last ten years. |
| 0.There are no indications that this is a real estate | | | | |