Home prices drop

Home prices in the Los Angeles metropolitan area, which includes Glendale and Burbank, fell from January to February, the first drop after eight consecutive months of growth, according to a real estate report released Tuesday.

The 0.7% drop in prices measured by the Standard & Poor’s/Case-Shiller home price index still maintained current sale values at a level that was 5.3% higher than in February 2009, according to the data.

The figures came a week after the California Assn. of Realtors reported that the median sale price for homes in Glendale fell 20.8% in March compared with the same period last year, although the median rose 3.3% in Burbank and 8.3% in Los Angeles County. The mixed regional results likely reflect a trend toward recent sales of more lower-priced homes, experts said.

The sales mix in Glendale may have included more expensive homes in the past than are on the market and selling today, which likely pushed down the median sales figure, they said.

Still, the March median sale prices — $439,000 in Burbank and $399,000 in Glendale — indicate an increase in activity on the lower end of the price spectrum, most likely because more distressed homes are being sold, real estate experts and agents said.

“There’s a lot of transactions happening,” said Leslie Appleton-Young, chief economist for the California Assn. of Realtors. “They’re just happening at greatly reduced prices.”

Banks are beginning to foreclose on and auction homes with distressed mortgages after months of restraint, said Robert Bridges, professor of real estate finance at the USC Marshall School of Business.

“This is really a big thing that’s going on right now,” Bridges said. “The fact that all of these auctions are going on, not just in L.A., but kind of around the nation, that is really recognition on the part of the banks that they really do need to get this stuff off of their books.”

By placing more homes on the market, through auctions that often yield low selling prices, lenders are helping to stimulate some purchase activity, although not on the high end of the market, he said.

That could help establish a floor for the market and a basis for a price recovery, Bridges said.

“If you’re auctioning these things, you really know what the market is willing to pay, what the perceived market prices are for these things, and that becomes the bottom of the market,” he said.