SoCal Home Prices Hits Five Year Peak

This time last year we saw the market make an incredible turn for the best – everything from the price of homes to the number of buyers on the market skyrocketed. Since then, the market has stayed relatively flat – an indicator that the market is still recovering, and may be stabilizing a bit. Recently, it appears that the market is making another shift, as a new report has indicated prices are once again going up.
rise in price
In one of their most recent reports, DataQuick, the San Diego-based real estate data tracker, has announced that the median price of a home in Southern California has increased to $400,000, up $17,000 from the month before and the highest we’ve seen since February of 2008.

The median price is also up 15.8% from the same month last year and is one of the first significant increase since the advances of last year.

DataQuick’s report wasn’t all good news though. While prices are going up, the number of sales in the area fell for the sixth straight month – likely due to the remaining investors leaving the market and few traditional homeowners jumping in to replace them. In fact, there were only 17,638 homes sold in the six-county SoCal region this March, a 14.3% decrease from the same month last year and the second lowest for this month in almost twenty years.

“Southland home buying got off to a very slow start this year,” said Andrew LePage, an analyst at DataQuick. “We see multiple reasons for this: The inventory of homes for sale remains thin in many markets. Investor purchases have fallen. The jump in home prices and mortgage rates over the past year has priced some people out of the market, while other would-be buyers struggle with credit hurdles.”

While these trends appear to be widespread throughout the market, there are some segments which are reacting differently to the ongoing recovery.
High-end homes, for example, have continued to see increases in both price and volume. Sales of homes valued over $500,000 have increased by 2.9% since this time last year, while sales of homes valued at over $800,000 have jumped by over 5.4%.

Do you believe these price increases will spur more sellers to enter the market, or will they drive buyers out of the market leading to another period of stagnant sales? What are your thoughts?

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