Southern California Housing Hits Third Record Price in a Row
Tuesday, May 25, 2021
What a difference a year makes.
In April 2020, Southern California home prices dipped and sales plummeted by a third during shelter-in-place orders that all but shut down the economy.
This past April, though, a housing market boom roared into its 10th straight month with sales almost double year-ago levels and home prices hitting a third record high in a row.
Last month’s median home price – or price at the midpoint of all sales – hit $655,000, leaping $25,000 from March levels and $110,000 from April of last year, DQ News/CoreLogic figures released Tuesday, May 25, show.
That’s the second biggest one-year gain in records dating back to 1988, and it tied March 2013 for second-biggest monthly gain.
The region’s median set record highs seven times in the past 12 months, CoreLogic figures show.
April prices also hit record highs in five of six counties, with Los Angeles County’s median merely matching the March record of $750,000.
“The big story is just how much home prices are rising right now,” said Nicole Bachaud, an economic data analyst for the real estate website Zillow.com. “It’s definitely a market like we haven’t seen in a long time.”
Sales, meanwhile, almost doubled from last spring’s pandemic panic to 25,857 transactions. That’s the biggest sales volume for an April since 2005 and was up 86.2% from 13,889 sales in April 2020 – a month that saw sales fall to an all-time low for an April.
Last month’s sales also were 1.8% higher than in March. Sales were up month over month in every county in the region but Riverside.
Low mortgage rates continued to drive up demand just as millennials enter their initial homebuying years, economists said.
Rates on a 30-year, fixed-rate mortgage averaged 2.98% in the three months ending in April vs. 3.41% a year earlier, Freddie Mac figures show. That translates to 6% more buying power for house hunters.
At these rates, a buyer with 20% down would pay $2,204 monthly on the $655,000 median sale vs. a year earlier’s $1,935 house payment on the $545,000 median.
That’s just 14% more even though the median increased 20%.
At the same time, there were fewer homes for them to buy.
Zillow reported for-sale listings fell almost 20% over the past year to 38,220 homes on the market in April. Realtor.com reported L.A.-Orange County inventory was down 22% and Inland Empire inventory was down almost 64%.
This volatile combination of high demand and too few listings fueled a buying frenzy with bidding wars and drastic buyer tactics. Many were forced to bid on homes sight-unseen, often waiving mortgage and even inspection contingencies that would give them a comfortable exit should they discover a flaw in their deals, agents say.
As a result, homes averaged just eight days on the market in the Inland Empire and just 10 days in Los Angeles and Orange counties, Zillow reported.
“We’re keeping inventory down because it’s selling so quickly,” Bachaud said.
Zillow figures show about 42% of the sales in the Los Angeles-Orange County market were above the seller’s asking price.
Bachaud and several real estate agents noted the pandemic also gave the housing market an added boost, with demand for bigger homes up as buyers freed from their office commutes seek more space for social distancing and for work.
“We’re seeing this opportunity,” Bachaud said. “Now I can go (where I want) because the whole country is open up to me now. You don’t have to live in the downtown of a large city.”
Price gains are occurring across the U.S., Tuesday’s report from the S&P CoreLogic Case-Shiller Home Price Index. Data released for March — one month earlier — show the National Home Price index rose 13.2%, with a 13.4% gain reported for Los Angeles and Orange counties. Phoenix, San Diego and Seattle reported the highest year-over-year gains among 20 cities tracked, with increases as high as 20% in Phoenix. San Diego home values rose 19.1%.
The DQ News/CoreLogic report for April showed the median price of an existing single-family home also hit a record high of $720,000 in Southern California as a whole, with records also set in all six counties.
The resale price of condos hit record highs in every county but San Bernardino, with the regionwide median at $550,000.
The median-priced condominium sold for $610,000 in L.A. County and $615,000 in Orange County.
Here’s a county-by-county breakdown of medians and sales:
- Los Angeles: $750,000, up 19% from a year ago, tying the record set in March; sales rose 101% to 8,381 transactions.
- Orange: A record high of $872,750, up 15.6% from a year ago; sales rose 97.9% to 3,920 units.
- Riverside: A record high of $489,750, up 19.7% from a year ago; sales rose 80.8% to 4,669 units.
- San Bernardino: A record high of $436,500, up 23.7% from a year ago; sales rose 66.9% to 3,347 units.
- San Diego: A record high of 700,000, up 17.8% from a year ago; sales rose 74.1% to 4,347 units.
- Ventura: A record high of $705,000, up 18.5% from a year ago; sales rose 82.4% to 1,193 units.
Category: Housing, Economic News