Southern California's spike in home prices points toward sellers’ market
Housing prices spiked across the Southland in January as sales of distressed properties continued to decline, laying the framework for a sellers market, industry officials said Thursday.
Year-over-year increases in the median price ranged from 24.6 percent in the Los Angeles metro area to 22.6 percent in the Inland Empire, the California Association of Realtors said.
Reports from two other market trackers showed a similar trend.
"It's due to the shifting nature of the sales. We're seeing fewer foreclosures sales and sales of higher priced homes and that's pulling the median up," economist William W. Roberts, director of the San Fernando Valley Economic Research Center at California State University, Northridge, said of the price gains.
He expects the median price to increase by 8 percent to 10 percent this year and that will pull more sellers into the market.
This bodes well for the region.
"I'm looking forward to a much nicer year and a very good summer, especially with fewer foreclosures. We are kind of taking those houses off the table. It's (foreclosure activity) low enough now that they aren't a factor any more," he said.
Sales were a mixed bag "" down in some areas and up in others from a year ago. All markets saw sales fall from December, which is normal for the time of year. Scant inventory is also holding back sales.
"A rush by homebuyers trying to complete sales of higher-priced homes by the end of last year in order to avoid capital gains increases pulled forward sales that might have closed in January instead," association president Don Faught said in a statement. "Additionally, the extreme shortage of homes for sale continues to hinder California's housing market, as demonstrated by the nearly two months supply"
For all of California, sales of previously owned homes declined 3.9 percent last month from a year ago to an annualized rate of 491,720. That's the number of sales that would occur if the market matches last month's pace for the entire year. The median house price rose 24.1 percent to $337,040 from $271,490 a year ago. And it dropped 6 percent from $366,930 in December. It was the 11th consecutive month of annual price increases and the seventh consecutive month of double-digit annual gains.
The state association does not include condominiums in its sales and price statistics.
Also on Thursday the National Association of Realtors said that sales of houses and condos increased 9.1 percent last month to an annualized rate of 4.92 million and rose 0.4 percent from December.
The national median home price was $173,600 in January, up 12.3 percent from January 2012.
The state association's report showed that:
In the Los Angeles metro area, the median price of a previously owned house increased to $318,950 from $256,000 in January of 2012. It declined from $333,140 in December.
Sales increased 6.2 percent from a year ago and fell 20.1 percent from December.
In the Inland Empire, the median price increased to $207,530 in January from $169,280 a year ago and declined from $221,710 in December.
Sales fell 2.7 percent from January 2012 and dropped 12.6 percent from December.
Reports that track the San Fernando Valley market followed the same pattern.
The Valley economic research center said that:
The median house price jumped 20.6 percent to $422,000 last month from $350,000 a year ago. And it dropped $3,000 from December.
Sales of new and previously-owned houses and condos fell 6.2 percent to 1,042 transactions from 1,111 a year ago and were down 49.4 percent from 1,557 in December.
Foreclosure activity here continued to plummet. Notices of default issued by lenders in January plunged 76.8 percent to 181 from 781 a year earlier. And they dropped 49.9 percent from 410 in December.
Foreclosures fell 46.7 percent to 170 last month from 319 a year earlier. And there were 12 fewer foreclosures last month than in December.
"I'm surprised they were down this far and the notices of default are falling off the charts. It's the lowest it's been since 2005," Roberts said of the Valley's foreclosure activity.
The center tracks the market from Glendale through Calabasas and counts sales of news and previously owned houses and condominiums.
A report from the Van Nuys-based Southland Regional Association of Realtors said that:
In the San Fernando Valley the median price of previously owned home increased 20 percent in January to $420,000 from $350,000 a year ago. And it was up by $30,000 from $390,000 in December.