California Home Sales Leap by 8% : Real estate: The December gain is the fourth straight monthly rise. Realtors credit low mortgage rates and shrinking prices.
Home sales in California jumped a sharp 8% in December as buyers took advantage of a slight drop in mortgage rates and sellers continued to slash their prices.
It was the fourth straight month-to-month sales gain, the California Assn. of Realtors said, reaffirming many brokers’ belief that the worst of the Southland’s three-year-long housing slump is over.
“This report is some of the best news we’ve gotten in a long time,” said Walt McDonald, a Riverside broker and president of the realty trade group. “I think four straight months of sales gains prove that the market is finally turning around.”
The realtor group said homes in the state were sold at a seasonally adjusted annual rate of 462,060 in December, up from a 427,840 rate in November and 14% above the sales pace of December, 1991. Last month’s sales rate was the highest since last February.
Brokers said buyers were lured out by a slight drop in mortgage rates, an improving economy and some of the lowest home prices in years.
“Buyers have gotten their confidence back, and sellers are willing to deal,” said Jon Douglas, owner of 32 Southland real estate offices that bear his name. “Sellers are finally starting to realize that if they aren’t flexible and reasonable about pricing, they just aren’t going to sell.”
Home-sellers’ growing willingness to cut their prices was reflected in Wednesday’s report. The realtors said that the median price of a home sold in December stood at $193,760, down 0.3% from November and a steeper 2.4% below the $198,330 median of a year earlier.
Half of all homes sell for more than the median price and half sell for less.
Sales in Los Angeles County jumped 5.4% in December from November. Orange County sales rose 5.8%. A glitch in the realtors’ reporting system prevented it from publishing results for San Diego.
Sales surged 24.9% in the Riverside-San Bernardino area, a market where lower home prices primarily lure first-time buyers.
The number of homes for sale also dropped sharply in December, fueling sellers’ hopes that the dwindling supply would push prices higher.
The realtors’ unsold inventory index--which measures the number of months it would take to sell all homes on the market at the current sales rate--dropped to 10 months in December from 13.6 months in November.
“Lower supply would obviously put upward pressure on prices, but I think you’ll have to see inventory drop to a three- to four-month supply before you see any decent-sized increase in values,” said Kathleen Connell, a private consultant and chair of the UCLA Center for Finance and Real Estate.
“Prices aren’t going to jump anytime soon, because there’s still too many homes for sale and not enough people to buy them.”
The realtors’ report also said sales of condominiums surged 23.1% in December. The median price of a condo ended the year at $140,670, down 2.4% from November and 4% from a year earlier.
The realtors’ figures for condo sales often swing wildly from month to month because they are not adjusted for seasonal variations.
On Tuesday, the National Assn. of Realtors said home sales across the country rose 5% in December from November, to a seasonally adjusted annual rate of 4.02 million units. It was the fastest sales rate since May, 1979.
