Home Prices Surge Again in September
Home prices in the Southland’s two biggest markets posted a surprisingly large increase in September.
The median price in Orange County surged 20% from a year earlier to $368,000, just off its all-time high of $370,000 set in August, according to a report released Wednesday by DataQuick Information Systems Inc. The number of homes sold rose 3% to 3,848.
In Los Angeles County, the median price for homes jumped 16.5%, equaling its all-time high of $269,000 set in June. Sales increased 5% to 9,362.
Industry experts who have been predicting a slowdown, both for seasonal and economic reasons, were amazed by September’s activity.
“It’s surprising that price appreciation has continued as high as it has, as long as it has,” said Robert Reicher, an analyst at Market Profiles, a Costa Mesa firm that tracks real estate trends. “I think everyone still expects things to slow down in terms of prices, but it hasn’t happened yet.”
The continuing robust market, boosted in large part by the lowest mortgage rates in decades and a small supply of new and existing units on the market, is paying off handsomely for homeowners.
Median-priced homes in Los Angeles County have gained $3,167 a month in equity over the last year and $5,250 a month in Orange County, DataQuick said.
Those increases have helped some buyers move into newer, larger homes.
At Ladera Ranch, a master-planned community in south Orange County, builders this month sold 120 of 122 homes in less than an hour. The two others were sold later that week.
The sales pace shows “no sign of letting up,” said Anne Marie Moiso, marketing director at Rancho Mission Viejo, Ladera Ranch’s developer.
Les Thomas, president of Shea Homes of Southern California, agreed. His company put about 110 homes on the market in Orange and Los Angeles counties this month and has sold all but three.
“It’s another example that there continues to be a large undersupply of new housing for the market,” he said.
The DataQuick report documented sales that closed in September, reflecting deals between buyers and home sellers during the last 30 to 60 days.
The median price, the point at which half the homes in a given market sell for more and the other half for less, is considered more statistically accurate than the average price.
Signs that in the past have presaged market slowdowns have yet to emerge, said DataQuick analyst John Karevoll, who compiles the monthly data.
Despite a sharp increase in the number of people falling behind on their mortgage payments nationwide, the rate of those entering the first stage of foreclosure in Orange and Los Angeles counties in September remained at its lowest level in more than a decade.
Sellers in distress often have been able to find buyers to relieve their financial burdens, Karevoll said.
The average size of a down payment held steady at 13.5% in Los Angeles County and 20% in Orange County.
