Southern California Homes Up, Up and Away

By Gregory J. Wilcox

Daily News, Los Angeles

RISMEDIA, August 17 – (KRT) – Southern California's median home price hit a record in July for the sixth consecutive month but sales eased off from June's blistering pace because of continued tight inventory, an industry tracker said Monday.

Last month the median price appreciated 16.7 percent, to $469,000, said La Jolla-based DataQuick Information Systems.

Price records fell in three of six Southern California counties Los Angeles, San Diego and San Bernardino. Ventura, Orange and Riverside counties saw price records in June.

All increased from a year ago, though, with the gains ranging from a high of 27.6 percent in San Bernardino County to a low of 5.1 percent in San Diego County.

This is the second report in a week that showed the real estate market is having a strong summer. Last week the Van Nuys-based Southland Regional Association of Realtors' monthly report showed that the median price in the San Fernando Valley reached a record $600,000 in July after gaining $111,000 over the previous 12 months and that 1,203 single-family homes changed hands.

During July, consumers across the region bought 31,069 new and previously owned houses and condominiums, 5.8 percent fewer than a year ago and off 12.4 percent from June, DataQuick said.

However, June's 35,454 sales set a record for any month in DataQuick's statistical library.

So far this year, 204,588 houses and condos have changed hands, 2.7 percent fewer than last year's seven-month total of 210,159 sales.

"We're watching the market carefully for any signs of a turn, for any signs of the 'bursting bubble' that some analysts have been predicting. So far we're not seeing anything other than the normal incremental changes you would expect in the ebb and flow of a real estate cycle," Marshall Prentice, DataQuick president, said in a statement.

The company's July analysis showed that:

Los Angeles County continued to see strong price gains. In the past 12 months, the median jumped 20.2 percent, to $488,000. Sales slipped 7.3 percent, to 10,711 transactions.

Ventura County's median price rose 15.3 percent, to $579,000. Sales increased 9.8 percent, to 1,406 transactions.

San Bernardino County's median hit $328,000 and sales fell 5.8 percent, to 4,084 transactions.

Riverside County's median jumped 17.7 percent, to $385,000, and sales eased 3.5 percent, to 5,765 transactions.

The market does not appear to be strained. Foreclosure activity has bottomed out and remains at a low level, down payment sizes are stable and so are flipping rates and nonowner-occupied purchases, DataQuick reported.

DataQuick analyst John Karevoll believes that there are still price peaks to be reached.

"Of the five months that we have left I'm positive that three of them will be records," he said.

Even though the median price, the point at which half the properties cost more and half less, has been on a steep upward slope, low interest rates continue to ease some of the financial pain for buyers.

During July, homebuyers committed to a typical mortgage payment of $2,072, up from $2,021 for the previous month, and up from $1,846 for July a year ago. But adjusted for inflation, current payments are about 5 percent below their peak reached in the spring 1989 as the last boom market was nearing its end.

Strong demand and tight inventory continue to be market drivers.

"We thought we'd have twice the inventory out there," Karevoll said of this summer's market.

He's also surprised that the annual rate of appreciation has not dipped into the high single digits or low teens by now, but that is expected at some point.

But this market has been hard to predict.

"There are a whole bunch of micro theories out there (about the market's direction) and the upshot of them all is nobody knows," Karevoll said.

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