Southern California Homes Market Still Sees “Good Signs”
Southern California Homes Market Still Sees “Good Signs”
Some bemoan the rising prices of Southern California homes for sale and slower sales. Think again! We’ve come a long way since 2007. At that time, median prices for homes within the six-county area of Southern California’s real estate market reached a record of $505,000. For perspective, the median price today for new and existing homes and condominiums is chugging along at $415,000.
Home Prices Up
Home prices have been increasing rapidly in the last two years – possibly too fast. When interest rates were at two and three percent and investors were buying up the market, home inventory diminished dramatically. Properties with popular price points disappeared. And luxury homes in Southern California were also picked up readily.
Prices are still rising but at a more modest rate. Consider the equation if the annual gains of 20 percent experienced last spring should have continued over the past year. Prices would be outdistancing income opportunities. They already are. And because the housing bubble created such a bitter aftertaste, we agree with Andrew LePage, analyst at DataQuick market tracker in La Jolla. Stats showing slowly increasing prices and better economic indicators are “good signs.”
Sales Down
Sales have been affected. DataQuick reported sales in June 2014 down 4 percent compared to June 2013. After spiking in spring 2013, the rate of homes sales has been for the past nine months.
Several factors are responsible for slower sales. Higher home prices. Higher interest rates. Lower inventory. Tighter lending. Economic uncertainty. Fewer investor purchases. Fewer foreclosures and short sales. But look up! Approximately 40,000 homes were sold in California during May and June 2014. Even though that’s below the 25-year average of almost 50,000, sales are far better than they were a few short years ago.
Buying and Selling Southern California Homes
It is still a good time for buyers as well as sellers. Interest rates remain near historic lows and we don’t know how long they can be held down by the Fed.
For more information about opportunities to purchase Southern California luxury properties and real estate, call Bob Cumming of Keystone Group Properties at 310-496-8122.
