Low Interest Rates Spur Strong January Sales

A surge in Southland home sales accounted for the strongest January in 13 years, the result of reasonable mortgage interest rates and increased sales of affordable homes, according to DataQuick Information Systems.

A total of 22,011 new and resale houses and condos were sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in January. That was down 11.6% from 24,913 for December, and up 22.2% from 18,010 for January last year.

A decline from December to January is normal for the season. The sales count was the highest for any January since 23,379 homes were sold in 1989.

“Some of the January surge may be spillover activity, deals that couldn’t close in December. Lenders, appraisers and title companies have been scrambling because of the refinance boom, and some December escrows had to be extended into January,” said Mike Ela, DataQuick president.

The jump in sales was particularly noticeable in lower cost Riverside and San Bernardino counties, which are attracting more of Southern California’s first-time home buyers. The two counties account for half of all sales less than $125,000, up from one-third five years ago.

The median price paid for a Southland home in January was $236,000. That was down 4.5% from $247,000 for December, and up 12.9% from $209,000 for January last year. The year-over-year increase was the strongest since July 1989 when prices rose 14.7% to $179,000 from $156,000 a year earlier.

The typical monthly mortgage payment that Southland buyers committed themselves to paying was $1,195 in January. A year ago it was $1,066. The all-time peak was April 1989 at $1,360, DataQuick reported.