Prices in the Los Angeles housing market dropped 2.6% in May, according to a new report cited by the LA Times. And our market had been the little engine that could! LA "been showing more stamina than other parts of California," notes the paper, reporting that San Diego got hammered--the city saw the second-steepest decline in prices (6.7%). But Detroit took first place with a price decline of 9.3 percent.
And with new home sales slowing, builders are also in trouble--or at least not seeing the huge profits they once did. According to the Times, the May sales pace was 15.8% below a year earlier. "At that rate, it would take 7.1 months to sell off the supply of unsold homes, the report said," notes the paper. Also, the mortgage market is also getting worse, thanks to a new crop of defaulters known as Alt-A borrowers, a class of borrowers that used little or no documentation to verify their incomes, but are usually considered trust-worthy.
· Longer housing slump is seen [LA Times]