RECORD HOME PRICES, FALLING SALES 2007 RESIDENTIAL REAL ESTATE MARKET LIKELY TO ECHO 2006.

Byline: GREGORY J. WILCOX  Staff Writer

Southern California's residential real estate market finished last year with a split personality -- prices setting a record while sales tumbled to their lowest annual level since 1998, an industry tracker said Tuesday.

This year will likely bring more of the same, according to La Jolla-based DataQuick Information Systems.

In December the median price across the six-county region increased a modest 3.3 percent annually but hit a record $495,000, said DataQuick's report. The median price increased 1.6 percent from November.

It is now $2,000 above the prior record set last June of $493,000.

Last year's buyers will have to wait for appreciation to build, but those who got into the market before it turned should hold onto most of their gains.

``Some parts of the market may see some (price) declines, but I think the expectations for massive declines in values is unreasonable,'' said independent market analyst Nima Nattagh. ``Overall, homeowners are not likely to see a big drop in prices or an erosion in equity.''

That can't be said of sales.

Last month they fell 22.3 percent to 22,485 transactions across the region but increased 10.3 percent from November.

It was was the slowest December since 1995 when 19,202 homes were sold. DataQuick's statistics go back to 1988, and the December average is 23,699 sales.

For the full year, sales of new and previously owned houses and condominiums fell 19.4 percent to 286,754 transactions. The yearly sales total is the smallest since 274,705 properties changed owners in 1998.

``It's about as close to average as we can get,'' said DataQuick analyst John Karevoll.

Meanwhile, the annual median price -- the point at which half the units cost more and half less -- increased 5.7 percent to a record $495,000.

Prices rose to record levels in every county except San Diego, where they fell 0.8 percent for the full year. It is the first price drop there since 1995.

The market started turning down in 2004 with a 0.8 percent dip followed by a 0.4 percent slip the following year.

But last year, the long anticipated softening gathered speed as both sales and price appreciation weakened significantly.

DataQuick notes that year-over-year price increases have been in the single digits for nine months.

And Karevoll indicated that month's record median is due in large part to strong sales of new homes, which is normal for December. They accounted for 27.5 percent of all transactions.

``The market is still readjusting after the frenzy in 2004 and 2005. Market indicators tend to point in different directions during a turn. We are watching the San Diego market carefully, sales and price trends there have tended to lead the region,'' Marshall Prentice, DataQuick president, said in a statement.

December is the 13th consecutive month of a year-over-year sales drop in the region. But in San Diego County, they've fallen for 30 straight months.

Prices have basically been flat for about a year or more across Southern California, and most market watchers think that trend will continue.

Nattagh said December's price level reflects deals made in late in late October and November.

And he anticipates that prices will bounce around their current level into this year.

The report also showed:

In Los Angeles County last month, the median price increased 6.5 percent, the region's biggest gain, to a record $522,000. Sales fell an annual 12.9 percent to 7,703 transactions.

For the full year, the median price increased 8.5 percent to a record $510,000 and sales fell 16.8 percent to 99,053 transactions.

In Ventura County, the median price fell 5.9 percent last month to $593,000, and sales declined 13.8 percent to 978 transactions.

For the year, the median price rose 4.5 percent to a record $599,000, and sales fell 26 percent to 11,741 transactions.

In December, the typical monthly mortgage payment that Southland buyers took on totaled $2,265, unchanged from November and up from $2,255 a year ago. Adjusted for inflation, current payments are 1.5 percent above typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 6.6 percent below the current cycle's June peak, DataQuick said.

Indicators of market distress remained at a moderate level.

Adjustable-rate financing is flat. Foreclosure activity is rising but is still in the normal range. Down payment sizes are stable and flipping rates and nonowner occupied buying activity is down, DataQuick reported.

greg.wilcox(at)dailynews.com

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