Bad news for Southern California; home sales in August dropped to a 15-year low according to the LA Times. Sales plunged 36% from last year and 71% of Southern California zip codes are reporting declines in housing prices.

"Prices are falling everywhere," Christopher Thornberg, a former UCLA business professor who is now a principal at Los Angeles-based Beacon Economics, told the LA Times. "People just don't have the income to support these prices except with crazy mortgages — and now the mortgage money is going away, and people are walking away from their homes," Thornberg said.

With a shrinking pool of consumers who can qualify for a mortgage under new, tighter lending conditions and a flood of foreclosures on the market, home builders are actually having blow-out sales:

Dennis Hsii is counting on builder desperation to help him buy his first home. This weekend, the Los Angeles technology consultant hopes to renegotiate his contract to buy a $700,000 town home in Playa Vista that has been under construction for the last year.

That's because the town home's builder, Irvine-based Standard Pacific Corp., is hosting the equivalent of a car dealership "blowout" sale at Hsii's community and 48 others starting Friday. The company's goal: sell 200 homes in 10 days by offering mortgage loans with rates of less than 6%, along with other carrots.

On Wednesday, the company sent Hsii an e-mail promising a refrigerator, a washer and dryer, window blinds and a 42-inch flat-screen TV "at no additional cost" if he went ahead with his purchase. Hsii is looking for a cash discount instead

Worst August for home sales in 15 years [LA Times]
(Photo:Stephen Osman / LAT)