California housing prices plummeting

LOS ANGELES – Southern California home prices continued to fall at a record pace in February, and are now at 2004 levels, a real estate information service reported Thursday.

The median price for a Southern California home last month was $408,000, down 17.6 percent from a year ago, according to DataQuick Information Systems.

The steep price declines are putting many more homeowners “upside down” – owing more on their homes than their homes are worth. Forecasters say foreclosures will likely continue to rise and prices will fall further.

About one-third of Southern California homes sold in February had been foreclosed since January 2007, according to DataQuick. A year earlier, previously foreclosed homes accounted for 3.5 percent of sales.

Since September, each month’s sales totals have been the lowest for comparable months since 1988, DataQuick said.

The rapid pace of the decline has led Los Angeles economist Christopher Thornberg, who last year predicted a 20 percent decline in Southern California home prices, to revise his projection. He now thinks prices will fall 40 percent.

Last week, the Federal Reserve reported homeowners now own less than half the equity in their houses, the lowest level since 1945.

University of California, Los Angeles’ Anderson Forecast Director Edward E. Leamer also believes home prices are still declining. He had predicted a 20 percent to 25 percent decline from the peak.

The typical monthly mortgage payment that Southern California buyers committed to paying was $1,821 last month, down from $1,889 the previous month, and down from $2,303 a year ago, DataQuick reported.