SoCal Home Prices Plunge 27% in May
Today's data from DataQuick, which shows a 27% home price decline already in Southern California, suggests that Wachovia may be due for more pain than it is currently projecting for its loan portfolio.
Meanwhile, the upper end of the Southern California market remains very weak. "Sales remain especially slow in most higher-end markets, with jumbo mortgages (over $417,000) making up only a slightly higher percentage of all purchase loans in May than in April," says Andrew LePage, an analyst with DataQuick. "That doesn't bode well for the high-end, where so far prices have come off their peaks but have generally held up best."
This is bad news for homebuilder Standard Pacific (SPF), which generates a substantial portion of its revenue from selling luxury homes in Southern California.
Wachovia traded down 10 cents to $18.13 Monday, while Standard Pacific traded up a penny at $3.21.
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