Local housing market flailing

BURBANK — Home prices in Burbank and Glendale plummeted more than 12% in June as foreclosures soared in the second quarter this year, an ominous sign of the region’s worsening financial state, officials said Wednesday.

The average median sale price for single-family homes in Glendale, now $654,000, dropped 13% in June from the same point last year. The number of foreclosed homes shot up 418% in the second quarter this year, from the second quarter in 2007.

Similar housing troubles plague Burbank, where the median home sale price, $596,000, sunk 12.2% from last year, and foreclosures rose more than 127%.

The figures were released Tuesday by DataQuick Information Systems, a La Jolla-based real estate news service.

The plunging numbers could bring the region one step closer to the bottom of the barrel for housing market prices, said Judy Graff, a broker associate who deals in Burbank, Glendale and other San Fernando Valley neighborhoods.

“I think we’re close to the bottom,” Graff said. “I think we’ve seen the highest percentage we’ve seen on foreclosures; and for middle class homes — in the $400[,000] to $500[,000] range — those are starting to get sold fairly rapidly. I’m seeing things go in a month, and the investor classes are returning to the market.”

The most severe home price drop-off in Burbank occurred in a portion of its hillside community, encompassed by the 91501 ZIP code. There, home prices dropped to $655,000 in June, a decrease of 26.1% from last year.

The hardest-hit region in Glendale is the Adams Square district, where the median sale price for homes in June reached $440,000, a 32.2% drop from last year. Foreclosures shot up 800%, with nine of them recorded in the second quarter this year compared with just one during the same period last year.

But the continued drop in the local market, and the paralleled media coverage, has further entrenched people’s belief that the worst has yet to come, Graff said.

“I don’t want to paint a completely rosy picture, but in our middle-class areas, I don’t think it’s as bad as our people make it out to be,” she said. “If you look at actual numbers, there really aren’t necessarily as many foreclosures as you might think.”

For example, in Burbank’s 91505 ZIP code, which includes Bob Hope Airport, just 19 of 4,000 homeowners foreclosed in this year’s second quarter compared with last year’s. The 19 foreclosures was the largest amount in a Burbank ZIP code but represented a relatively small portion of homes in the region, she said.

Lenders started foreclosure proceedings on a record number of California homeowners last quarter, the result of declining home values and the rampant souring of risky home loans made in late 2005 and 2006, according to DataQuick.

This has had a chilling effect on businesses in Adams Square but has left homeowners there relatively unscathed, said Michael Teahan, president of the Adams Hill Homeowners Assn.

“They’re kind of entrenching themselves a little bit,” Teahan said. “People aren’t looking to bail in Adams Hill or Adams Square. It’s not really affected people. If you’re in your house now and working, then I don’t think it makes a difference.”

In the 91207 region, the median home price in June sunk 21.5% from last year, to $795,000. The 91206 ZIP code has median home prices of $800,000, a 23.7% decline from last June, mirroring a sharp rise in foreclosures there.

The worsening state of the housing market in the region and state has tipped the economy closer toward a recession, said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp.

“Los Angeles County is on the brink of a recession, and when you get to the housing sectors, we’re in a depression,” Kyser said. “We should see prices bottom out in L.A. County the middle of 2009 and in the inland areas of the state — from Sacramento all the way down to Riverside County, middle of 2010.”