Median price reaching lowest level since 2003

Home prices continued to tumble in San Diego County last month, with the median of $380,000 reaching its lowest level since September 2003.

A trio of factors – surging foreclosures, tougher lending standards and a weak economy – further pressured prices and demand for housing, according to La Jolla-based DataQuick Information Systems. May's median price was down nearly 23 percent from a year earlier.
The number of home sales inched up last month compared with April, as bargain hunters sought out good bank-owned deals. But overall, demand remains soft. The 2,979 sales last month represented a 12 percent decline from the same month last year.
Moreover, sales volume last month was lower than any May since 1995, when San Diego County was considerable smaller in terms of population and employment.
Foreclosure sales continue to cast a widening shadow over the housing market. Sales of bank-owned homes made up 36 percent of all sales last month. That compares with just 8 percent a year ago and 0.2 percent during the peak of the housing boom.
“What horsepower this market can generate right now is mainly fueled by bargain shopping, especially by first-time buyers and investors in inland areas,” said Andrew LePage, an analyst with DataQuick.
“During the housing boom, we came to expect discounts on everything we buy except housing,” LePage said. “Now we've re-shattered the notion that home prices can't fall. The expectation is everybody is going to get a deal.”
Re-sales of of single-family homes were down 3 percent from a year earlier to 1,782. But prices of resale homes fell from $557,000 last May to $420,000 this May.
LePage said the median might be skewed lower because sales are occurring mainly in less expensive neighborhoods. There have been relatively few sales in higher-prices, mostly coastal markets.