Southern California’s housing recovery barreled forward last month, pushing prices and sales to levels not seen in years as buyers faced stiff competition during the spring home buying season.
The median price reached $368,000 for all homes in the six-county Southland, which marked a 24.7% increase from the same month a year earlier and the highest price in five years. The number of sales, 23,034, hit the highest level for a May in seven years, real estate information provider DataQuick said Tuesday.
Historically low inventory and mortgage rates have ignited bidding wars and helped turn the housing market into an economic bright spot — in the Southland and nationwide. Investors have also played a major role in the recovery that began last year, purchasing run-down, lower-cost properties to fix up and then rent out.
Home prices in Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura counties all posted double-digit increases last month compared with May 2012. In Los Angeles, the median skyrocketed 30.2% to $410,000.
“We’re deep into uncharted territory: Amazingly low mortgage rates, a razor-thin inventory of homes for sale, and the release of years’ worth of pent-up demand,” John Walsh, DataQuick president, said in a statement. “How this all plays out is educated guesswork at this point.”
The swift price increases have raised bubble concerns among some, but many experts note prices remain far from the peak and say the spikes will likely ease as inventory increases from new home construction and as more owners — lured by higher prices — place their homes on the market.
Still, May’s median price was 27.1% below a peak of $505,000 in 2007.
The median sales price is the point at which half of homes sold for more and half sold for less; it is influenced by the types of homes selling as well as a general rise or fall in values. DataQuick said that most of May’s increase could be attributed to a general rise in value, while about a quarter came from a change in the types of properties sold.
Homes priced $500,000 or more increased to 31.3% of all home sales, the highest percentage since February 2008. Meanwhile, homes selling for under $200,000 declined as investors flush with cash have already scooped up many of those properties.
Sales declined in Ventura, Riverside and San Bernardino counties but increased in Orange, Los Angeles and San Diego counties.
The sales of distressed properties also continued to fall. Homes that had been foreclosed upon within the last year comprised an estimated 10.8% of resold homes in May, a decline from 26.9% a year earlier.