Southern California’s housing market is starting to pick up the pace.
Home sales in the six-county Southland grew for the first time in a year in September as prices moderated from last year’s torrid gains, according to figures out Monday.
The data are the latest sign of a housing market that’s reaching equilibrium after years of big swings, economists say.
FOR THE RECORD:
Home sales: In the Oct. 14 Business section, an article about September home sales said that contacts by prospective home buyers at real estate firm Redfin had increased by 50%. That figure was for the Los Angeles market, not nationwide. —
Higher prices have pushed many investors and cash buyers out of the market, while still-low interest rates and an improving economy are luring more so-called regular buyers. And while prices aren’t climbing at the 20%-plus pace of last year, they’re still rising enough to keep sellers interested in selling.
“It seems like we’re heading toward more of a balance,” said Mark Gonzales, an agent with Redfin in West Los Angeles. “As long as we can get pricing right in line with people’s expectations, we’re in balance.”
That balance helped drive the number of sales across the region up 1.2% compared with a year ago, according to San Diego-based CoreLogic DataQuick. It’s a modest bump, but the first growth of any kind since September 2013, and a big swing from the 18% slide CoreLogic recorded in August.
Sales growth was strongest in Los Angeles and Orange counties, instead of in less-expensive markets farther east. And prices actually fell a bit, with the region’s median slipping to $413,000 from its post-crash high of $420,000 in August. Compared with a year ago, the median price is up 8.1%, and September was the first month in two years that none of the six counties CoreLogic tracks notched a double-digit annual gain.
The market right now has something to offer both buyers and sellers, said CoreLogic analyst Andrew LePage.
“There are still upward forces on home prices: Jobs are being created and families started at a time when the supply of homes for sale … remains relatively low,” he said. “Today’s home shoppers are more likely to find a less-crowded market with fewer intense multiple-offer situations and more serious, realistic buyers.”
It’s unclear, though, how long this equilibrium will last.
The California Assn. of Realtors last week forecast that price gains will keep slowing in 2015, and that sales will increase — after falling in 2014 — as buyers have a better chance to catch up to the new higher price points. But in a market in which many buyers struggle to afford a house, the prospect of higher interest rates is a constant threat, said the trade group’s chief executive, Joel Singer.
“Any increase is going to have a substantial effect on the number of sales,” Singer told a roomful of agents last week at the association’s annual convention in Anaheim.
Right now, though, rates are as low as they’ve been all year. The job market is improving. Even gasoline prices are down, which is putting would-be buyers in a better mood, said Syd Leibovitch, president of Rodeo Realty. His firm, one of the largest brokerages in Southern California, is starting to see both prices and sales pick up again for deals that will close later this fall.
“It was really unexpected,” he said. “August was a slower month. It seemed like homes were starting to sit and we were going into a more normalized market. Somewhere around mid-September it picked back up again. We started getting more multiple-offer situations.”
Gonzales has been seeing things quicken too. Calls and visits to Redfin’s website by prospective buyers were up 50% in September, and those house hunters are now out shopping.
“They were frustrated with the way the market was going. A lot of them took a break,” he said. “Now it’s a prime time to come back in.”
And as they do, the pace of home sales should pick up even more speed, analysts said.