L.A. County Median Home Price Surpasses $300,000
The typical purchase price of a home in Los Angeles County broke the $300,000 mark for the first time in April -- and there’s nothing to suggest it won’t keep going up.
The supply of houses for sale would have to grow significantly to help relieve the upward pressure on prices. That might not happen. So far this year, the pool of available properties has been shrinking. And the most recent statistics by the California Assn. of Realtors show that the supply of listed houses and condos in Los Angeles County dropped in March to a level far below the 10-year average.
“The problem is, we have the buyers but no properties to sell to them,” said Marty Rodriguez, a Century 21 broker in east San Gabriel Valley.
The tight supply has been sparking bidding wars for months, and that has been helping push up home prices throughout the Southern California region.
The median sales price of new and existing homes in Los Angeles County in April rose 19% from the same month last year, to $303,000, according to a report released Tuesday by DataQuick Information Systems.
And April was the 26th month in a row of double-digit percentage gains, said the La Jolla-based real estate research firm, which tallies sales and prices from property records.
As for actual sales in the county, they were up 1.2%, to 11,407 properties. That was the highest for any April since 1989 and came despite the war in Iraq and an otherwise sluggish economy, according to DataQuick.
April sales and price results for the rest of Southern California weren’t available Tuesday. In March, DataQuick said, the median price in Orange County was nearly $394,000. Even in the more affordable Riverside County, the median price in March was $237,000.
Although the low inventory has been a boon to sellers, buyers enticed into the market by historically low mortgage rates are finding it increasingly tough to compete.
“There are several buyers looking at each listing when they come on the market,” said broker Ed Watkins of Signature Realty in the Santa Clarita Valley. “The competition is stiff.”
The 10-year average inventory in Los Angeles County is 7 1/2 months -- meaning that at the historically normal rate of buying, it would take that much time for the supply to be exhausted. In March, the inventory dropped to two months, from three at the beginning of the year.
In the east San Gabriel Valley, Rodriguez says, there is no shortage of buyers for homes less than $400,000 but that the inventory in that range is tight.
For example, there are about 25% fewer houses available for sale in the relatively affordable communities of Glendora, San Dimas and La Verne than there were last year at this time, she says.
Earlier this year, Curtis and Vicki McFarland were overjoyed when they sold their Chatsworth condominium at its full price of $254,000 in one day. But then the couple started searching for a home in the Santa Clarita Valley and found themselves on the losing end of three bidding battles before they finally snagged a $363,000 house in Saugus last month.
“It was very frustrating,” said Curtis McFarland, 36, a construction manager. In some cases, he said, they showed up within two hours after a property was put on the market, “and there would be two or three couples already walking through the home.”
The sharp gains in Los Angeles County can be explained largely by the swelling number of homeowners who are trading up. Housing economist G.U. Krueger said that home prices in Los Angeles did not recover fully from the disastrous real estate bust of the early 1990s until 2001 -- two years after Orange County -- so there was a smaller pool of potential move-up buyers. With the sharp gains in the last two years, many more property owners can afford to move into higher-priced houses.
“We are just now seeing all the accelerated home price appreciation because of that,” Krueger said.
The market’s surprising strength prompted Prudential California Realty’s Los Angeles division -- the region’s second-largest real estate brokerage -- to revise its estimated annual sales volume to a 5% gain this year instead of a decline from last year’s record-setting pace. Attractive mortgage rates, which remain at nearly 40-year lows, will keep many buyers in the market despite lofty prices, said division President John Aaroe.
“The median price going up and breaking the $300,000 mark will not have any impact on the market whatsoever,” Aaroe said. “We continue to have on a daily basis multiple offers on lower-priced properties.”
