Home Sales Stay on Fire, Especially in Inland Empire

The Southern California housing market delivered another strong performance last month, setting an all-time record for sales in the Inland Empire and the 30th consecutive month of double-digit price increases for the entire six-county region.

Yet some real estate experts suspect the region’s supercharged market is finally beginning to calm down.

The median price for homes sold in the Southland hit a new record of $328,000 in July -- up 21% from a year earlier -- according to figures released Wednesday. In addition, a total of 33,561 new and existing homes were sold, which was the highest monthly sales count in nearly 15 years.

Riverside and San Bernardino counties easily led the region in sales of new homes, with year-over-year increases of 35% and 36%, respectively.

“Clearly, the Inland Empire is the strongest area for growth right now,” said John Karevoll, an analyst at DataQuick Information Systems, which compiled the real estate statistics. He said Riverside County alone had more than a third of Southern California’s total new-home sales.

Median home prices rose from a year ago in all six counties, with Orange County again fetching top dollar at $428,000. In July, the median price for new houses and condominiums in Orange County was $549,000, for existing houses it was $465,000 and for existing condominiums, $300,000.

Only Ventura County topped Orange County’s median price in any category, with a $619,000 median price for new homes in July. That was a year-over-year increase of 48%.

“It is absolutely crazy,” said Veronica Sheffield, a Pacific West Realtors agent in Ventura. “Two months ago, I couldn’t imagine [prices] going any higher, and now this. How much more can we honestly expect to see?”

Maybe not much, some agents said. Besides an increase in the number of homes coming onto the market -- which typically means fewer bidding wars, lower asking prices and longer sale times -- the recent uptick in interest rates also has reduced consumers’ buying power.

The average rate for 30-year fixed mortgages rose last week to 6.22%, up almost 1.25 percentage points from its record low in mid-June, according to a weekly survey by the Mortgage Bankers Assn. of America.

Demand for home loans nationwide fell 11% last week to their lowest level in more than a year, the survey showed. And while the decline was led primarily by a drop in refinancing applications, which have fallen more than 70% since May, experts said they expect the interest rates to affect applications for purchase mortgages as well. Already that number has dropped 15% since the end of May, according to the survey.

“I doubt very seriously we’re going to see these kinds of monthly price increases and sales numbers much longer,” said Scott Gibson, president of real estate firm Coldwell Banker’s Los Angeles division. “The market is still strong, and will stay strong, but I believe we’ve almost reached the peak.”

Indeed, Wednesday’s housing statistics from DataQuick probably don’t reflect the recent jump in interest rates because properties that closed in July had been in escrow for a month or so, when rates were still at or near their lowest levels. More telling, Gibson and others said, would be the monthly figures for August home sales.

In July, though, prices in all categories of homes in Southern California showed strong gains.

Existing single-family homes rose 21% from a year earlier to $336,000, and new homes climbed 14% to $378,000. Existing condominiums posted the largest increase, up 22% to $264,000.

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Hot July

The Southern California housing market continued its upward trend in July, especially in the Inland Empire.

*--* # sold # sold % Median (in % price thousands) Area July ’02 July ’03 change July ’02 July ’03 change Los Angeles 10,889 11,926 +9.5% $266 $328 +23.3% Orange 4,664 5,046 +8.2% $360 $428 +18.9% County Riverside 4,730 5,398 +14.1% $208 $254 +22.1% San 3,743 3,977 +6.3% $160 $196 +22.5% Bernardino San Diego 4,962 5,687 +14.6% $333 $382 +14.7% Ventura 1,621 1,527 -5.8% $331 $403 +21.8% So. 30,609 33,561 +9.6% $272 $328 +20.6% California

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Source: DataQuick Information Systems