Monday, October 15, 2012

Home prices keep rising in Southern California; higher-end market heating up

Southern California's median home prices rose again in September to a more than four-year high, the result of very low mortgage rates, rising demand and scant inventories, housing experts reported Friday.

The combination has pushed up the price of homes by 1.9 percent from August, and 12.5 percent from September 2011, according to San Diego-based DataQuick.

The median price of a home in the six-county Southland edged up from $309,000 in August to $315,000 in September, up from $280,000 in September 2011. The new mark was the highest median price in the region since reaching $330,000 in August 2008.

In Los Angeles County, the median price of a home climbed from $310,000 to $340,000, a 9.7-percent increase from last year. San Bernardino County posted the largest year-over-year percentage increase in the six counties at 13.3 percent, but recorded the lowest median home price of $170,000. The highest median home price in the Southland belongs to Orange County, at $450,000.

The 49-month-high median home price in Southern California reflected a healthier mix of residential sales in September, housing experts said. 

"The latest stats suggest unbelievably low mortgage rates and modestly higher consumer confidence continue to put pressure on a supply-starved housing market," said John Walsh, DataQuick president. 

"We can't stress enough, though, that the median sale price and other price measures reflect more than just rising home values," he continued. "There's been a major change in market mix, meaning fewer low-priced sales, fewer foreclosures re-selling, and more sales in middle and upscale markets."
Real estate agents from across the Southland Friday echoed Walsh's finding that the mix of sales has included more higher priced homes and fewer foreclosures. 

Donna Baker with Podley Properties in Monrovia said she noticed more home prices in the $500,000 to $800,000 range selling in the last few months. 

"We are definitely seeing that. We were seeing so many foreclosures and short sales in 2010 and 2011. Now, we are not seeing much of that at all," Baker said. "The market is coming back. It is definitely a good sign."

Realtors report closing more sales of upscale homes, a sign of a healthier "move-up market." Often, homes are attracting numerous offers, setting off a bidding war that crescendoes with the home selling above the asking price. 
"As long as these homes are priced reasonably, many are getting multiple offers and selling in the first week," reported Dave Knight with Keller Williams in Pasadena. Knight recently sold a house in the Madison Heights neighborhood for $2.2 million. 

Sales of homes prices above $1 million are doing well in parts of the San Fernando Valley as well, said Chad Schlotterback, team leader with Keller Williams Sherman Oaks-Encino.
"Unfortunately, if a listing comes out with a fair price, there are five to 10 prices on it. That has driven up the prices," he said. 

Consumer confidence is another factor ramping up activity.
"The fear of real estate sliding much further south has dissipated," Schlotterback said. "It has caused investors and homeowners to be more willing to go out and buy (more expensive homes). Also, the jumbo rates are more favorable." 

Others who have moved in with parents after losing employment have found jobs and are looking for more space. 

"We are starting to see people bursting at the seams. They may have merged families and have outgrown their existing home," said Steve Johnson, director of Southern California Metrostudy, a real estate information and consulting firm. 

Marty Rodriguez, of Century 21 in Glendora, says although there was a decline in the number of sales in September over last year, sales of existing inventory is picking up and being fueled by low interest rates

"Interest rates are on sale. Real estate is on sale. That is the time to buy," she said.
Johnson predicts rising home prices and higher sales volumes to continue through the end of the year. "We will keep working our way through these inventories. We should feel good about ourselves about the third quarter of 2013," he said.

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