Southern California home prices continued a double-digit rise for a year and a half last month, setting a record for the eleventh time in just over a year.
Meanwhile, home sales have fallen compared to a year ago, but still have the second-highest figure of the month in the last 15 years.
With the spring 2022 home buying season just beginning, economists and agents say the market has cooled following a buying frenzy in 2021, but only slightly.
Homes are taking a little longer to sell than last spring, but they still have an average of less than two weeks on the market. Homes are getting fewer offers than before, but more desirable properties still end up in supply wars.
“Prices are hitting new highs, and the reason is that in most parts of Southern California we still don’t have the influx of inventory we expected to see,” said Danielle Hale, chief economist at Realtor.com. website. “Homes sell as fast as they go on the market.”
CoreLogic data shows that the average price of a Southern California home, or the average price of all sales, was $ 706,000 in February, 15.4% more than in February 2021, DQ News reported on Tuesday, March 15th. It’s a $ 94,000 gain in 12 months. , equivalent to a $ 1,800 price hike each week.
Prices reached or tied record highs in all but one county, Los Angeles, in the six-county region.
Sales fell 8.8% from last year’s boom to 16,905 transactions, according to the DQ News / CoreLogic report. But it was still the second highest sales figure for every February since 2007.
Demand continues to be driven by first-time and advanced millennial buyers who are entering their 40s and raising families, said CoreLogic’s deputy chief economist Selma Hepp. Additional demand also comes from buyers and investors of second homes.
“It’s unclear if the war in Ukraine has had any direct impact on the US real estate market yet, but if it does, it will probably be on the sidelines,” Hepp said.
Hepp and Hale said some buyers are pulling money out of a nervous stock market and looking for relative real estate security. Both economists also say a nearly 1 percentage point jump in mortgage rates over the past year has prompted some homebuyers to buy now before rates go up further.
A report on the OJO Labs website showed that nearly six out of 10 homes in the Los Angeles metropolitan area were sold above the sale price in February, the third highest share among 50 U.S. cities.
One was a three-bedroom, one-bedroom home in Van Nuys that was priced at $ 700,000 but closed at $ 848,000 after receiving at least 15 offers, said Steve Mullins, an ad agent for Vista Sotheby’s International Realty in Manhattan. Beach. Mullins said he has yet to see a slowdown in the market.
“We see several offers,” he said. “Prices keep moving. There’s a lot of money out there.”
The lack of homes for sale is the main reason, say agents and economists.
Zillow reported that Southern California had 26,743 homes for sale in February, up from 36,247 the previous year and 47,359 two years earlier.
Increased competition among home buyers occurs when rising interest rates affect their purchasing power.
30-year fixed-rate mortgage rates averaged 3.76% in February, up from 2.81% the previous year.
As a result, someone able to pay for a $ 600,000 home could only afford $ 532,500 last month, while a $ 1 million home buyer in February 2021 could afford to pay just over $ 887,000.
The rapid jump in house prices has been a double-edged sword, Hale said of Realtor.com.
Existing homeowners have enriched themselves with their expansion of real estate. The National Association of Realtors reported last week that the “housing wealth” of the United States has increased by $ 8.2 trillion – or 52% – to $ 24.1 trillion during the decade ending in 2020. That it’s good for the economy, Hale said.
“If people feel richer, … they tend to spend more,” he said. But, he added, “For households that do not yet own homes but aspire to be homeowners, rising house prices raise the bar for them to put a foot in the door.”
Only a quarter of homes in the Los Angeles metropolitan area could afford to buy a home at an average price, requiring an income of at least $ 134,000, the California Realtors Association reported.
Mortgage rates are still low by historical standards, but the year is expected to end closer to 4%.
That will further curb purchasing power, driving some home buyers out of the market, said Nicole Rankin and agent of Re / Max Top Producers in Corona.
Hale said the pace of earnings from house prices is expected to slow, perhaps in the second half of 2022. CoreLogic predicted that the rate of appreciation of prices will fall to 3.8% by next January.
“Rising interest rates have cooled (the market) a bit,” said Pablo Salcedo of Placentia, a HomeSmart Evergreen Realty agent. “From houses that receive 20-30 offers, it has gone to 5-10.… (But) it is still a battle in some (houses).
Here’s a breakdown of average home prices and sales by county:
– The Los Angeles County median increased 13.2% to $ 800,000; sales fell 5.7% to 5,348 transactions.
– Orange County median increased 20.1% to $ 985,000; sales fell 18.6% to 2,217 transactions.
– Riverside County median increased 20.3% to $ 565,000; sales fell 3.5% to 3,430 transactions.
– The median in San Bernardino County rose 17.7% to $ 485,000; sales were down 4.1% to 2,359 transactions.
– The San Diego County median increased 15.2% to $ 775,000; sales fell 10.6% to 2,885 transactions.
– Ventura County median increased 16.2% to $ 755,000; sales fell 19.5% to 666 transactions.
Region’s home prices hit another record in February, rising to $706,000 – Press Telegram Source link Region’s home prices hit another record in February, rising to $706,000 – Press Telegram