If you are looking to buy a starter home in Southern California, then you are likely to pay a premium from last year.
With fewer low-cost homes and foreclosures on the market, people looking to get into the market at a cheap price are paying more. It’s also pricier to move up. And sales of higher-end homes are also increasing.
Prices for the cheapest third of the Southland’s housing market were up 4.9% from the same month last year, 4.8% for the middle and down 0.8% for the top third, real estate research firm DataQuick reported Tuesday.
These days, the number of foreclosed homes on the market is sinking. The market also includes more regular sales and so-called short sales, where a lender allows a property to be sold for less than the debt owed. More homes are also selling in coastal areas such as Los Angeles and Orange counties.
DataQuick reported that the number of homes in the Southland that sold for less than $200,000 fell 5.8% from the same point a year earlier. Homes between $300,000 and $800,000 surged 13.4%. Sales of homes costing more than $800,000 rose 7.2%.
Those changes in the kinds of homes selling helped lift the overall median last month. The median price for the region last month was $306,000, a 2.0% increase from June and up 8.1% from July 2011.
And when it comes to median home price gains in the Southland, it’s all about the mix.
The median price is a statistical measure that finds the point where half of all homes in a region sold for more and the other half for less. The median is used to measure home price gains more often than using an average because an excessive number of outliers either on the high-end of sales or the low end can skew the data.
But the median is also far from a perfect measure of home price appreciation. It often reflects the kinds of homes selling during a certain period and the kinds of neighborhoods these homes sold in.
For instance, during the worst of the housing slump the median price dragged as foreclosures dominated the market, particularly in inland parts of California such as Riverside and San Bernardino.
The trend for now is headed in the other direction. The firm DataQuick estimated that about half of the 8.1% annual gain in July’s median sale price could be attributed to the change in the mix factor.