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The county's median price was $345,000, up sharply from $329,500 in April and $300,000 from May 2009. The higher numbers reflect increased home sales in many pricier coastal locations, as well as declines in the lower-priced communities, according to Dataquick (see chart below). Last month 21.6 percent of all Southern California sales were for $500,000 or more, compared with 19.3 percent in April and 17.4 percent a year ago. Presumably, the government stimulus programs were helpful, as were lower mortgage rates. Financing, though, remains a struggle: Jumbo loans (mortgages above $417,000), still account for less than one-in-five loans; before the credit crisis, it was 40 percent. From the Dataquick press release:
"Last month's jump in the regional median sale price is the flipside of what we saw a year ago, when low-cost inland foreclosures dominated and sales in the costlier coastal towns struggled for a pulse. Today the bargains on foreclosures are fewer and farther between, and the high-end is approaching a normal sales rate," said John Walsh, MDA DataQuick president. "The important thing to remember, though, is that what we saw in May was partly driven by government stimulus," he continued. "In the second half of the year the market will have to stand on its own again, barring new forms of government involvement. Prices will be tested if there's any sudden move by lenders to release a flood of distressed properties."
Forecasts about the summer home-buying season are all over the map. Ed Leamer, director of the UCLA Anderson Forecast, calls it a "homeless recovery," with only slow improvement of the housing market. Other economists expect the loss of government tax breaks to result in a big drop in sales. Logic doesn't point to a strong summer, not with all the concerns about jobs, debt, etc.
One more thing: Lots of folks doing all-cash deals:
Buyers who appear to have paid all cash - meaning there was no indication that a corresponding purchase loan was recorded - accounted for 24.5 percent of May sales, paying a median $220,000. In April cash sales were 28.6 percent and a year ago it was 26.1 percent. The 23-year monthly average for Southland homes purchased with cash is 14.1 percent.
MAY HOME SALES (% change from May 2009)
Los Angeles 7,320 +12.3%
Orange 3,257 +22.1%
Riverside 4,164 -5.7%
San Bernardino 2,835 -9.5%
Ventura 815 +2.3%
MAY MEDIAN HOME PRICES (% change from May 2009)
Los Angeles $345,000 +15.0%
Orange $450,000 +9.8%
Riverside $210,000 +16.7%
San Bernardino $160,000 +16.8%
Ventura $380,000 +7.0%
Source: MDA DataQuick, DQNews.com
Mark Lacter created the LA Biz Observed blog in 2006. He posted
until the day before his death on Nov. 13, 2013.