Southern California home prices jumped in December, reaching the highest level in more than nine years.
An improving economy and a shortage of homes for sale propelled prices up 6.8% from a year earlier, real estate data firm CoreLogic said Tuesday. December’s median price of $470,000 was up 1.1% from a month earlier.
In Los Angeles County, the median price last month climbed 4% from a year earlier to $520,000; in Orange County, 5.3% to $665,000; in Ventura County, 5.9% to $519,000; in San Bernardino County, 8.7% to $299,000; in Riverside County, 8% to $345,750; and in San Diego County, 4.2% to $495,000.
The rise in last month’s six-county median price comes after prices stayed largely flat since June, when the regional median hit $465,000 — which at the time was a nine-year high.
Many economists have projected prices will keep rising in 2017, but not as much as they have in recent years. That’s because incomes haven’t kept up with home prices in a hot housing market and mortgage rates have risen since the November presidential election. The average rate for a 30-year fixed loan was 4.09% last week, up from 3.54% the week before the election.
Whether prices do level off remains to be seen. Job growth has been robust in California, and there are few homes on the market — two factors primed to juice prices.
In December, data from the California Assn. of Realtors show there was only a 2.6-month supply of homes on the market in Los Angeles and Orange counties — meaning no homes would be available for sale after 2.6 months if sales continued at their current pace and no new listings emerged.
The Realtors consider a six- to seven-month supply to be a market that favors neither buyers nor sellers.
Rising mortgage rates, while making housing more expensive, could also produce additional demand if people rush to lock in rates before they climb higher.
For the moment, that doesn’t appear to be happening en masse.
CoreLogic reported sales dropped 2.9% last month compared with December 2015.
CoreLogic analyst Andrew LePage said a large part of that decline was because new federal lending regulations took effect in fall 2015 and pushed many deals that would have closed in November of that year into the following month.
“The number of deals recorded in December 2015 was artificially high,” he said in a statement. That factor, along with an additional business day last year, “outweighed whatever boost December 2016 sales got from the presidential election.”
For the entirety of 2016, sales across the region were up 2.1% from 2015 — with the strongest gains seen in the comparatively affordable Inland Empire counties of Riverside and San Bernardino.
Nationwide, the National Assn. of Realtors said Tuesday, sales of previously owned homes fell 2.8% in December compared with November after adjusting for seasonal fluctuations. Still, sales for the entire year were the best since 2006.