Home Prices Rise to Record
Southern California home prices rose to record highs in April but did so at their most sluggish pace in more than three years, data released Monday showed.
The median home price in the region’s six counties rose 15% last month on a year-over-year basis to $445,000, according to DataQuick Information Systems, a La Jolla-based real estate tracker. That surpassed the previous record of $439,000 set in March.
But it was the slowest rate of appreciation since March 2002 and came after an 18.6% gain two months ago and increases exceeding 20% for the last year, DataQuick said.
Orange County showed a much slower rate of appreciation. Although the county’s median price rose to a record $576,000, its gain of 10.1% on a year-over-year basis was the lowest since October 2001, DataQuick said.
In San Bernardino County, the median price topped $300,000 for the first time.
Home sales too persisted at near-record levels. In April, 31,431 transactions were completed in the Southland, a decline of 4.5% from a year earlier, DataQuick reported. But that was still the second-best showing since DataQuick started keeping statistics in 1988. The sales record was set in April 2004.
The latest results underscored what many experts have been predicting for about a year: Relatively low mortgage rates and steady demand would keep the region’s real estate market on an upward trajectory, but at a more tempered pace.
“Quite simply, prices are going up, but not as fast as last year,” said Christopher Cagan, director of research at First American Corp.’s Real Estate Solutions division. “There’s still a great deal of appreciation left” in the market.
Consider 92833, a ZIP Code in Fullerton where prices declined at least 12% in each of the first three months of the year, by Cagan’s analysis.
For a few months, 92833 “essentially fell out of fashion” with buyers, he said, even as other Fullerton neighborhoods continued to see price gains.
Yet, April data show that prices there have sprung back. The median rose 5% to $635,000 last month, Cagan’s review showed.
John Bussman, a real estate agent who often represents Fullerton sellers, said shifts in the local real estate market were, at best, subtle.
“Houses remain on the market longer” compared with a year earlier, he said. However, homes priced at $500,000 or less sell quickly, whereas those priced at more than $700,000 “become harder to move.”
Yet, he added, “there’s still lots of activity.”
Kenny Lu and fiancee Kristine Taylor sense that prices aren’t rising as fast, but they also think many homes are overpriced. So the Fullerton couple are staying vigilant for bargains. “We want to be ready to pounce,” Lu said.
One way they’re doing that is keeping track of new listings. Lu and Taylor recently bought a home in a probate sale because they knew it was priced below market, and they hope to find similar deals for investments.
“We’re trying to find undervalued properties,” said Lu, 30, as he and Taylor toured an open house Sunday in the Sunny Hills neighborhood of Fullerton.
They may have a long wait. The region’s slowing rate of appreciation isn’t necessarily a harbinger of a more dramatic downward market turn, said John Karevoll, DataQuick’s chief analyst. The monthly statistics have consistently shown the same pattern throughout the region -- smaller percentage gains but also record prices.
“It’s uniform straight across the board,” Karevoll said.
For one thing, the supply of available homes remains tight while demand has held steady.
“Inventory levels are about the same as a month ago -- they haven’t fallen but they haven’t increased,” said Patrick Veling, president of Brea-based consulting firm RealData Strategies.
That dynamic has helped Southern California continue to log steady gains. In April, Los Angeles’ median price set a record, rising 15.5% to $447,000. The median price is the point at which half of all homes sell for more, half for less.
San Bernardino County’s median price surged 32.8% to $304,000 while Riverside County’s rose 21.4% to $374,000, DataQuick reported.
San Diego’s median rose 10.3% to $484,000 and Ventura’s gained 9.5% to $529,000.
Only Ventura and San Bernardino counties showed an increase in sales last month; the remaining counties posted declines. But the results were still close to previous highs.
“Everyone is looking for signs of weakness,” Veling said, “but they haven’t found any yet.”
