State Home Sales Up, Bucking U.S. Trend : Real estate: New signs of a price upswing have California buyers braving rising mortgage rates a second consecutive month.
California home sales eked out another small gain in June, the state’s realty trade group said Monday, as buyers shrugged off rising mortgage rates for the second month in a row amid new signs that prices have reversed their four-year-long decline.
Analysts said California’s sales gain was particularly notable because sales in most other parts of the country fell. In a separate report released Monday, the National Assn. of Realtors said U.S. home sales dropped 3.6% in June, as rising mortgage rates were blamed for keeping most would-be buyers elsewhere on the sidelines.
Homes in the state were sold at an annualized rate of 485,260 last month, up a modest 0.5% from May, the California Assn. of Realtors said. Sales were especially strong in most southern parts of the state, jumping 8% in Los Angeles County, 9% in the Inland Empire and 4% in Orange County.
Prices statewide also rose and the number of homes on the market continued to drop--an indication that more price hikes could be in store. The median price of a house stood at $185,450 in June, up a strong 1.3% from $183,070 in May.
“We’ve got a solid, sustained housing recovery going on here,” said Pat Neal, an Orange County broker and president of the state trade group. “Even the big increase we saw in mortgage rates a few months ago hasn’t held the market back.”
Rates on fixed, 30-year mortgages stood at about 7% in February but have since jumped to about 8.5%. The increase has added about $150 to the monthly cost of a $150,000 loan.
“It looks like the California (housing) market is catching up with the rest of the country, which has done pretty well over the last couple of years,” said Fred Flick, an economist for the national association and the group’s director of research. “Maybe California’s ‘day in the sun’ has finally arrived.”
Sales in the Southern California region have been particularly strong now that the worst of the layoffs in the aerospace industry are over and the economy is showing new signs of life, analysts said.
About 15,550 houses in the region were sold last month, a healthy 12% increase over May and 27% ahead of last year’s sales levels, according to Dataquick Information Systems, a La Jolla-based real estate research firm.
The number of homes for sale also continued to dwindle. The California realtors said their unsold-inventory index dropped to 7.7 months in June from an 8-month supply in May and an 11-month supply a year ago.
A supply of about nine to 11 months is considered normal, said Leslie Appleton-Young, the state realtors’ economist. June’s 7.7-month reading indicates that California’s long “buyer’s market” is beginning to disappear and that more upward pressure on prices could be on the way, she said.
Southland Home Sales
Sales of existing single-family homes in Southern California, in thousands:
July, 1994: 15.6
Source: Dataquick Information Systems
