Low Rates, High Demand Overcome Escalating Housing Costs

Strong demand and low mortgage interest rates fueled a sales pace last month only moderately off year-ago levels, as prices reached a new peak in Southern California, a real estate information service reported.

A total of 26,010 new and resale houses and condos were sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was up 44.1% from 18,050 for February and down 9.1% from 28,609 for March 2000, according to DataQuick Information Systems.

An increase from February to March is normal for the season. The year-ago March sales count was the strongest in a decade; a “normal” March is around 20,400.

“We are not seeing any cataclysmic changes in the market other than normal shifts in market mix. Buyers are not stretching their finances any more than normal; price increases are being offset by lower mortgage interest rates,” said Mike Ela, DataQuick president.

The median price paid for a Southland dwelling was $228,000 last month. That was up 5.6% from $216,000 for February and up 11.8% from $204,000 for March a year ago.

All counties except San Bernardino set or equaled price peaks last month. San Bernardino County is absorbing a surge of entry-level buyers from other areas, activity that tugs the median down.

The typical mortgage payment that Southland buyers committed themselves to paying was $1,163 in March. A year ago it was $1,183 and 10 years ago it was $1,219, when mortgage interest rates were higher. The all-time peak was $1,360 in April 1989, DataQuick reported.