by Calculated Risk on 5/12/2008 12:34:00 AM

Here are a couple of stories of transaction volumes increasing in some of the hardest hit areas of California.

From the North County Times: HOUSING: Signs of life appear in Southwest Riverside County (hat tip Tony)

... the southwest corner of Riverside County may be showing signs of recovery.

In April, the number of houses sold was higher than the year before for the fourth straight month, leaping 73 percent last month from a year ago.
...
The median home price ---- in which half the homes sell for more and half for less ---- in the region sank to $265,000 in April, a mammoth 36 percent off the $415,000 median in 2007 and 40 percent below the $439,900 level of 2006.
...
Meanwhile, North San Diego County's housing market is not showing similar signs of recovery. Its median price has fallen about 25 percent from its peak to $490,000, but house sales for the last 28 months have been lower than the same month the year before...

Rich Toscano, at Professor Pigginton's, adds some commentary on San Diego:

One really helpful puzzle piece was supplied by SD Realtor a couple weeks back. He posted some data showing that while volume has declined in many higher end areas, it is actually up quite substantially in some of the areas that have really been crushed (e.g. Eastlake).

His conclusion was that the price declines have gotten so bad in some areas that buyers are starting to creep back in. But where the prices have been stickier, demand remains quite weak. This is a sensible analysis and I tend to agree.

It sounds like volumes are only increasing in the lowest priced, and hardest hit areas. Transaction volumes are probably picking up because of all the REO sales in these areas.

This doesn't mean prices have bottomed - especially in real terms - but the increase in transaction volume might indicate that most of the nominal price decline has already occurred for some low end areas.