Homes sales in Southern California area are up 65% for September 2008 as compared to the same period last year.

The good news for the Southern California economy is that homes are selling once again. September 2008 home sales in the Southern California region were higher than in any month since December 2006. and the year-over-year gain was the highest for any month since 1988 according to DataQuick.

Although this increase is astounding, everything must be looked at in context to get the true picture of the real estate market. September 2007 sales represented a record low, since changes in the lending industry had bumped up the rates for jumbo mortgages the month before. And 50% of the homes sold in September 2008 had been foreclosed on sometime within the prior year.

“More impressive was that this September’s sales volume bucked the seasonal norm and rose above August,” says DataQuick president John Walsh. Foreclosure resales by county continues to tell an interesting story, as Riverside County once again tops the list at 68.9%. Los Angeles County is near the bottom of the list this month, with foreclosure sales at 39.1%.

With the higher level of foreclosure resales comes a decline in prices. The median price for the SoCal region dropped to $308,500, which is the lowest since May 2003. However, the median price never tells the complete story, since it is affected by regional price depreciation, relatively slow high-end sales, and the rising market share of foreclosure resales, which tend to sell at a discount. Also, remember that the Palmdale-Lancaster area continues to dominate the foreclosures in the Los Angeles County region. For 3rd quarter foreclosure (trustee sale) stats, click here.

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