Southern California Real Estate Market Recovering

The Southern California real estate market continued its move towards recovery in May, when the median sale price rose year-over-year for the second consecutive month, reaching a 20-month high. Home sales increased across the region but the gains were highest in coastal areas, where move-up markets have picked up steam, a real estate information service reported.

     The median price paid for a home in the six-counties of So Cal rose last month to $295,000, up 1.7 percent from $290,000 in April and up 5.4 percent from $280,000 a year ago.

     Last month’s median was the highest since the median was $295,500 in September 2010. The year-over-year gain in the May median followed a 3.6 percent annual increase in April. Before then, the median had fallen year-over-year for 13 straight months.

     The rise in the median price is the result of higher demand and two other trends. First, there’s been a significant drop in the share of transactions that are foreclosed properties, which tend to sell at a discount and be concentrated in lower-cost areas. Second, a greater portion of sales are occurring in the higher-cost coastal markets. Last month, for example, sales in San Diego, Orange, Los Angeles and Ventura counties represented about 70 percent of all activity, up from 67.6 percent a year ago.

     May’s total  sales in the region increased by almost 21 percent compared with a year ago.  Activity and sales rose as well.But the gains were strongest above $300,000. The volume of transactions in lower-cost markets has been restrained by, among other things, the decreasing

      Last month’s $295,000 median sale price was 41.6 percent below the $505,000 peak in mid 2007. It was 19.4 percent above the Southland’s low point for the current real estate cycle – $247,000 in April 2009.

In May, a total of 22,192 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. That was up 15.1 percent from 19,284 in April, and up 20.6 percent from 18,394 in May 2011.

Home sales typically rise between April and May, with that increase averaging 6.7 percent since 1988, when DataQuick’s statistics begin.

On a year-over-year basis, Southern California residential real estate sales have increased for five consecutive months, with last month’s 20.6 percent annual gain the largest in the series. Sales have also increased year-over-year in nine out of the last ten months.

The month-to-month and year-over-year increases in sales last month would not have been as great if this May hadn’t had one extra business day on which sales could close. While last month had 22 business days, this April and May 2011 had 21 business days.

Last month 22.4 percent of all Southland sales were for $500,000 or more, up from 21.0 percent in both April and a year earlier. The share ofr luxury home sales (above $500,000) was the highest since July 2010, when they also made up 22.4 percent of the market.

Distressed sales – the combination of foreclosure resales and short sales –accounted for 44.8 percent of last month’s resale market. That was the lowest level since the figure was 44.4 percent in March ’08.

Foreclosure resales – properties foreclosed on in the prior 12 months – accounted for 26.7 percent of the resale market last month, down from 28.8 percent in April and 33.2 percent a year earlier. Last month’s figure was the lowest since foreclosure resales were 24.3 percent of the resale market in December ’07.

Short sales (pre-foreclosures) made up an estimated 18.1 percent of resales last month. That’s unchanged compared with the month before and up from 17.8 percent a year ago.

Credit remained tight last month in an historical context, though the share of purchase loans that were in the “jumbo” category edged higher.

Please contact Krystyna Baty for a complimentary home evaluation report.  Call 310.918.5027 or email



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