Southern California home prices rise on low supply
SAN DIEGO (AP) — Southern California home prices rose in December as investors made cash offers to compete for slim pickings, and sales grew in pricier coastal regions, according to reports released Tuesday.
The median price for new and existing houses and condominiums reached $323,000 in December, up 19.6 percent from $270,000 during the same period of 2011, DataQuick reported.
The median rose $2,000 from November to December to its highest level since August 2008, when it hit $330,000.
There were 20,274 homes sold during the month in the region, up 5.3 percent from the same period last year.
Supplies remained tight. The California Association of Realtors index of unsold inventory in the Los Angeles metropolitan area stood at 2.8 months in December, down from 4.8 months a year earlier.
The figure represents how long it would take to sell all existing single-family homes in the region at the current sales clip. Supply in a normal market is considered to be six to seven months.
Josh Martin, a retired Marine who was approved for a $260,000 Veterans Administration home loan, said he was outbid on four homes in the past two months in the San Diego area.
"It's been really tough," said Martin, 25, a prospective first-time homebuyer. "Each time it's people paying cash and flipping homes or (the sellers) get turned off by a VA loan."
Buyers paying cash accounted for 33.8 percent of December sales, up from 29.8 percent a year earlier and well above the monthly average of 17.3 percent since 2000, DataQuick said.
The San Diego-based research firm said the high percentage of cash purchases reflected difficulties getting home loans and investor interest in real estate.
Foreclosed properties — a major driver of sales until recently — continued to dry up, further limiting supplies.
DataQuick said homes that were foreclosed in the previous year accounted for 14.8 percent of existing home sales in December, down from 32.4 percent a year earlier and 56.7 percent in February 2009.
The Inland Empire, which had been buoyed by foreclosure sales, was the only part of Southern California to see sales drop. San Bernardino County, the least expensive county surveyed with a median sales price of $180,000, saw sales tumble 11.7 percent from last year. Riverside County witnessed a 9.4 percent sales decline.
The Inland Valleys Association of Realtors, which represents large parts of San Bernardino and Riverside counties, recorded 51,797 sales listings last year, the lowest since it began keeping track in 2001, said Paul Herrera, director of government relations and communications. Yet there were 43,587 homes sold, which is about average, suggesting there is enough demand to support more sales.
Herrera said listings will increase when homeowners who bought properties in the past two or three years decide to take profits.
"The demand is there, but the supply has to match it," he said. "It has to come from new construction ... or hopefully gains in value."
Pricier, coastal regions posted the strongest sales gains. Orange County, the most expensive county with a median sales price of $470,000, saw sales jump by 19.4 percent from last year. San Diego County, with a median sales price of $366,000, had the second strongest sales growth, up 13.5 percent.