The Southern California housing market, known for its dramatic swings, is settling into a more normal, healthy pattern.
Home sales are up. All-cash and investor purchases are down. And home prices are rising at a more sustainable pace than in the last few years.
Economists said those factors put the regional housing market on a path for growth that won't wash away in a tsunami of foreclosures and ruined credit scores.
“The healing continues,” said Stuart Gabriel, director of UCLA's Ziman Center for Real Estate.
On Thursday, fresh evidence of that trend emerged in a report from CoreLogic. Home sales posted a sizable 18.1% pop in June from a year earlier, while the median price rose 5.7% from June 2014 to $442,000, the real estate data firm said.
The sales increase, the largest in nearly three years, put the number of sales just 9.6% below average, CoreLogic said. A year ago, sales were nearly 24% below average.
Notably, it appears more families are entering the market as the economy improves. Although still elevated in comparison to long-term averages, the share of absentee buyers — mostly investors — slid to 21.1%, the lowest percentage since April 2010, CoreLogic said.
“This is the real recovery,” Christopher Thornberg, founding partner of Beacon Economics, said of a market where increasingly buyers actually want to live in the houses they purchase. “The last was the investor recovery.”
Sustained job growth has given more people the confidence to buy houses, CoreLogic analyst Andrew LePage said. California added a robust 54,200 jobs in May, one of the strongest showings in the last year.
The housing market improvement extends nationally, with sales of previously owned homes up in May to the highest pace in nearly six years, partly because more first-time buyers entered the market, according to data from the National Assn. of Realtors.
One factor driving deals is an expected decision from the Federal Reserve to raise its short-term interest rate later this year, real estate agents say.
In response, families rushed to lock in historically low rates this spring, agents say. CoreLogic's sales figures represent closed deals, meaning most went into escrow during May.
Leslie Appleton-Young, chief economist for the California Assn. of Realtors, cautioned that the market still has too few homes for sale and that prices have risen to a point where many can't afford a house.
Unless that changes, sales are unlikely to reach levels in line with historical norms, she said.
“I am not saying the housing market isn't robust,” she said.
“I think housing affordability is a big issue.... The biggest problem is losing millennials to places like Denver and Austin and Seattle.”
For now, deals are on the rise and people are paying more.
Sales and prices climbed in all six Southland counties: Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura. In Orange County, the median price rose 4.9% from a year earlier to $629,500.
In Los Angeles County, prices climbed 8.7% to $500,000.
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