Competition among homebuyers drives prices up in Burbank
The number of homes and condominiums for sale remained low in September compared with the same period last year, but median prices notched up again, fueled primarily by multiple offers, according to the latest figures.
There were 107 single-family homes for sale last month, a 68% drop from the 180 on the market in September 2011, according to statistics compiled by the Burbank Assn. of Realtors.
Thirty-seven homes sold last month, up from 31 during the same period last year. And the median price rose from $460,000 in September 2011 to $525,000 last month.
The number of condos on the market last month — 25 — was down from 35 last year. Meanwhile, the median price increased to $297,500, from $265,000 at the same time last year.
The housing market appears to be improving, said Paul Habibi, real estate professor with the UCLA Anderson School of Management.
“Price stability is the No. 1 most important thing for housing,” he said. “We are now seeing a market where prices are stable.”
He said that while low housing inventory sometimes makes it tough for first-time buyers because of multiple offers, an ongoing high number of homes for sale would be worse.
Two other factors are contributing to higher median prices, Habibi said: a lower number of foreclosures on the market; and high-end homes in better condition are now selling as “move-up buyers” enter the market.
Burbank stayed true to the foreclosure trend last month. Bank-owned homes made up about 22% of total sales in the city, which was down from almost 26% a year ago.
If prices continue to climb and existing home sales keep improving, Habibi said housing construction may pick up again in the next two years or so.
But don’t expect prices to soar again like they did several years ago, when median prices jumped by double digits every year.
“That’s not sustainable,” he said.
Right now, developers are focusing on apartments as younger people are putting off buying a house because they can’t find one in their price range, they’ve been outbid repeatedly on a home, or they are too financially strapped, Habibi said.
They also want to live closer to work because of traffic congestion. And because there is more job mobility today — in which a person might have 10 to 15 jobs during their career — putting down roots in a home isn’t appealing.
“[Improved] transit will make that a bit easier in the future,” Habibi said.
Follow Mark Kellam on Twitter @LAMarkKellam.
