Home Prices, Sales Continue to Rise Sharply in California
California home prices and sales continued to soar ahead in May, with the statewide median sales price of existing homes jumping more than 10%, according to a real estate report released Thursday.
Home prices also moved up strongly across Southern California, but there are signs--on the Westside of Los Angeles, at least--that buyers have begun to back off in the face of spiraling prices, according to some prominent real estate brokers. The Westside was one of the first areas in Southern California to emerge from the real estate bust, and in the last year, values in some choice neighborhoods have shot up $100,000 and more.
“The sales are still there, but there is also [buyer] resistance,” said broker Fred Sands of the Westside, which is a bellwether for the Los Angeles-area real estate market. “It was starting to get crazy.”
Statewide, sales of existing, single-family homes in May totaled 646,470 properties on a seasonally adjusted, annualized rate, according to the California Assn. of Realtors. The May rate--which does not include new homes or condominiums--represents a nearly 20% increase from the same month last year.
The median price of an existing, single-family home sold in May increased 10.5% from the same month last year to $204,440, according to the real estate association.
The state’s housing market continued to benefit from low mortgage rates, high consumer confidence and a robust economy, housing observers said.
“Despite the clouds forming over Asian economy, the housing market in California is performing remarkably well,” said Tim Corliss, president of the real estate association. “There are only faint signs of the impact of the Asian crisis on the Northern California housing market thus far.”
May results for the Los Angeles area, which are not seasonally adjusted, showed a 16.6% increase in the sale rate while the median sales price for existing homes rose 7.2% on a year-over-year basis to $186,580. Orange County home prices continued to soar, with the median sales price rising 16.2% to $263,230 in May.
Four of the 10 California communities with the highest median prices in May were located in the Los Angeles area: Pacific Palisades, $705,045; Beverly Hills, $690,000; Westside of Los Angeles, $660,000; and San Marino, $650,000.
While demand remains heavy for homes, brokers on the Westside said they have noticed that buyers in recent weeks have grown more reluctant to jump into the market as prices continue to soar.
“The buyers are stepping back and looking at the price,” said broker John Aaroe, who expects sales activity to drop by 10% in the coming months from the frantic pace seen during the past year. “That seems to be what we are heading for.”
Scott Gibson, who heads the Los Angeles-area operations of Coldwell Banker Jon Douglas, said sales remain strong and multiple offers remain commonplace. However, he has seen more price reductions and a rise in the number of homes listed for sale, which could give buyers an opportunity to spend more time shopping without feeling forced to make a quick purchase. Some buyers have started to look at more affordable alternatives to the Westside, such as Studio City and the South Bay.
“We might have hit a little price plateau” on the Westside, Gibson said. “The market seems very healthy, but everybody seems to have settled down a bit. Nothing goes straight up forever.”
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Still Rising
Home prices and sales in California continued to climb in May.
In thousands:
Sales
May: 646.5
*
Median Prices
$204.4
Notes: Sales and median prices exclude new homes and condominiums. Sales figures are on an annualized, seasonally adjusted basis.
Source: California Assn. of Realtors
