Southern California home prices jumped in February, posting the largest increase in more than a year, as buyers rushed to outbid one another for a meager selection of homes for sale.
The six-county region's median price for new and resale homes hit $460,000 last month, up $5,000 from January, real estate firm CoreLogic said Tuesday. The median — the point where half the homes sold for more and half for less — is now 7% higher than it was in February 2016.
That's the largest year-over-year rise in 15 months and follows nearly five years of steady price increases, a result of a rebounding economy, low mortgage rates and few homes on the market.
Low inventory — as well as one fewer day to record sales last month than in February 2016, which included a leap day — probably had a role in the 1.7% decline in sales from a year earlier, CoreLogic said.
Given the scant listings, another competitive spring buying season is likely. Last month, there was a smaller supply of homes for sale than a year earlier in every Southern California county, data from the California Assn. of Realtors show.
Real estate agents say the shortage has people crowding open houses.
Joe Reichling, an agent with Sotheby's, said about 25 groups toured his open house last Saturday for a $799,000 two-bedroom bungalow off Sunset Boulevard in Silver Lake. When he wrapped up after two hours, he checked out an open house for a $599,000 two-bedroom home in Pasadena.
With its lower price, it was even busier.
"There were twice as many buyers," Reichling said.
Underpinning the demand is an economy that has consistently added jobs. The January unemployment rates in Los Angeles and Orange counties stood at 4.9% and 3.9%, respectively. That's down from 5.6% and 4.1% a year earlier.
Similar trends are seen at the national level. U.S. employers added a net 235,000 jobs last month, and the unemployment rate fell to 4.7% — just above its decade low. With few homes on the market, national prices in December rose by the most in 2 1/2 years, according to the most recent Case-Shiller index.
Last month in Southern California, the median price for new and resale homes climbed in all six counties tracked by CoreLogic.
In Los Angeles County, February's median price increased 7.9% from a year earlier to $525,000; in Orange County, 5.7% to $645,000; in Ventura County, 4.2% to $520,100; in San Bernardino County, 7.3% to $295,000; in Riverside County, 10% to $346,500; and in San Diego County, 8.1% to $492,000.
But it's increasingly debated how much longer prices can keep jumping.
Mortgage rates have risen since the November election, and price increases have far outpaced income gains in recent years — two factors many economists predict will cause home values to rise less than they did in years past.
Last week, the average rate on a 30-year fixed mortgage was 4.3%, up from 3.54% in the first week of November, according to government-backed mortgage buyer
February's median price for Southern California homes is also $5,000 below what it was last summer, though that's not unusual given that demand tends to be weaker in winter months.
Such seasonal fluctuations, CoreLogic said, can make January and February data an unreliable predictor of future trends, and a clearer picture of the market's trajectory will emerge in coming months.
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