DataQuick Information Systems, the same guys who brought us last week’s year-on-year price reduction in San Diego, are reporting that home prices in Southland are at their highest-ever levels.

The median price of a home in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties was $439,000 in June, DataQuick reported. That’s up 1.6 percent from May, the company reported, and is up 6 percent from June last year.

The price news comes on the back of the lowest level of sales in seven years, DataQuick reported. The month-on-month increase in prices was also the smallest increase since May 2000.

DataQuick’s press release quotes the company’s president, Marshall Prentice:

Many view this as a great conundrum: Prices continue to rise, even set records, as sales continue to slow. It happened for two years in San Diego before prices last month finally fell slightly below year-ago levels. We view this as the normal winding down of a real estate cycle, where declining demand gradually erodes price growth until it halts or reverses. We expect more markets to see prices flatten or decline a bit in the second half of this year.

The news won’t come as a surprise to many analysts in Southern California. Economists around the region and around the country have been watching San Diego for a sign of what’s coming next in their own neighborhoods. As such, San Diego’s regarded by many experts as the “canary in the coal mine” for the real estate market. San Diego’s home prices have clearly slipped faster than the rest of the region, but DataQuick’s numbers show other cities aren’t far behind.

There’s one other section of the press release that’s really interesting:

The typical monthly mortgage payment that Southland buyers committed themselves to paying was $2,437 last month, up from $2,376 for the previous month, and up from $2,021 for June a year ago. Adjusted for inflation, current payments are about 8.4 percent above typical payments in the spring of 1989, the peak of the prior real estate cycle.

I’ve never seen those figures before and they’re interesting because they show the actual economic toll on homeowners. If borrowers are paying out $350 more on their mortgages this year than they were a year ago, that’s $350 less that each of those borrowers can spend on consumer goods or on services like eating out or going to the movies.

Couple that decline in disposable income with the fact that many San Diegans, in the words of one expert, “don’t feel as rich these days” because they see their home price declining, and you’ve got less consumer spending. In a service-based economy like San Diego, that’s not good news.


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