Southern California posts most November home sales in six years
Southern California’s housing market surged again last month, with the number of homes sold climbing more than 14% from a year earlier to the highest level for any November in six years.
It was the 11th straight month of year-over-year increases, according to real estate research firm DataQuick. The median home price for the region was $321,000, up from $315,000 the two prior months and a nearly 17% increase over $275,000 in November 2011.
And driving the surge: A notable recent pickup in sales of trade-up and luxury homes. All-cash purchases, many by deep-pocketed investors, also remain unusually high.
“More buyers feel confident about their jobs, the economy and the likelihood housing prices have bottomed,” said John Walsh, president of research firm DataQuick, which reported that sales of Southland homes for more than $500,000 jumped 47% in November compared with a year earlier.
The firm reported that 19,285 houses and condominiums were sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That’s up 14.2% from 16,884 sales in November 2011.
The data also indicate a new trend that shows sales of homes priced at the bottom end of the market are slowing. The number of Southern California homes that sold for less than $300,000 in November was down about 8% compared with a year earlier. For homes under $200,000, the decline was nearly 19%.
The drop-off in part reflects a sharp decline in the number of foreclosure sales made at discounted prices, analysts at DataQuick and elsewhere said.
“Distress sales have been declining, especially in California,” where foreclosures are processed rapidly outside of the court system and investor interest is high, Moodys.com housing analyst Celia Chen said.
But other factors are at work as well, underscoring the distress still felt in lower-income neighborhoods.
Not only are potential buyers in these areas competing with well-heeled private investors, but advocates say their efforts to buy have been stifled by tighter lending standards. It is even proving to be more difficult for some to obtain Federal Housing Administration loans, the traditional go-to mortgage for first-time and lower-income borrowers.
What’s more, greater numbers of these homeowners are still trapped by the huge tumble in home prices in areas such as the Inland Empire and Central Valley.
“Lower-cost markets typically have a relatively high percentage of homeowners who owe more than their homes are worth, meaning they can’t sell and move,” DataQuick noted.
Robert Gnaizda, a longtime advocate for minority neighborhoods, said banks remain tightfisted to requests for loans from lower-income borrowers with minor credit dings.
“I can’t entirely blame them,” said Gnaizda, co-founder of Berkeley’s Greenlining Institute. He said the bankers are reacting to investor demands that they buy back soured loans and pressure from regulators to reduce risks.
Faith Bautista, president of the National Asian American Coalition, said many families that lost houses in distress sales four or five years ago have since found good jobs and saved up to once again buy homes. She said these would-be borrowers are being denied even FHA loans, which require that borrowers pay extra for government insurance.
“It seems the new government policy is to only make loans to people with credit scores higher than 700 and 20% down payments,” she said.
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