Southland Home Sales Maintain Strong Climb
The upswing in Southern California home sales continued through May,amid indications that prices may have bottomed out, a real estate information service reported.
A total of 21,467 new and resale houses and condos were sold in Los Angeles, Ventura, Orange, Riverside, San Diego and San Bernardino counties last month.
That number was up 8.8% from 19,728 in April and up 32.6% from 16,195 for May last year ( see accompanying chart, Page 6 ), according to DataQuick Information Systems of La Jolla. Last month’s sales count was the highest for any single month since August 1990, when 24,298 homes were sold. So far this year, 85,867 homes have been sold in Southern California, up 25.3% from 68,509 for the same period last year. This year’s sales have been the strongest since 1990, when 109,692 were sold during the January-to-May period.
“We’re starting to see some activity in market categories that have been stagnant for the past few years, especially the move-up market,” said Donald L. Cohn, DataQuick CEO. “We expect sales to stay strong for the next few months, although the increases probably won’t be this high. We’re watching prices closely.”
The median price paid for a resale single-family home was $164,000 last month. That was up 1.2% from $162,000 for April and up 2.5% from $160,000 for May a year ago. The year-over-year increase is the strongest price increase since mid-1991.
The increase in Southland sales and the apparent turnaround in price declines in many markets are not the only indications that the real estate market is at a juncture and poised for increases.
The amount of money that home buyers are borrowing is going down after three years of steady increases. Borrowing less indicates that buyers are not stretching as far as they did a year ago. Twice as many buyers are financing with fixed-rate mortgages as with adjustable-rate mortgages. The opposite was the case a few years back.
The “average” mortgage payment for a Southland resale house was $963 in May, assuming the median price, a 20% down payment and the prevailing interest rate for a 30-year fixed-rate mortgage. That’s up from a recent low of $836 in February but still a far cry from $1,453 for April 1989.
Construction activity is showing steady growth, indicating that the home building industry is optimistic about sales for the rest of the year. Projects that have been on hold for years are nearing completion, especially in North San Diego County and in Orange County.
Foreclosure activity is headed down after a surge earlier this year, when lenders tightened foreclosure policies.
Lenders began foreclosure on 8,857 homes last month, the lowest this year and down from 10,088 for April. March was the all-time peak month with 10,831 notices of default being recorded on houses and condos in Southern California.
DataQuick monitors real estate activity nationwide and provides information to consumers, lending institutions, title companies and industry analysts.
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Southland Home Sales
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County May ’95 May ’96 Pct. May ’95 May ’96 Pct. Sales Sales Chng. Med (K) Med (K) Chng Los Angeles 6,710 8,400 25.2 $164 $164 0.0 Orange County 2,528 3,865 52.9 $193 $198 2.6 San Diego 2,443 3,284 34.4 $163 $168 3.1 Riverside 1,857 2,545 37.0 $126 $123 -2.4 San Bernardino 1,813 2,343 29.2 $120 $121 0.8 Ventura 844 1,030 22.0 $184 $199 8.2 So. California 16,195 21,467 32.6 $160 $163 1.9
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