Home Prices Hit Record Again
Across Southern California, home prices hit record highs in June and they keep going up, according to a report released this week by CoreLogic.
In Los Angeles County, the median home price in June jumped 7.4% from a year earlier to $569,000 in June, breaking the previous record that was set in May. In Orange County, the median was up 6.1% from 2016, tying a record reached the prior month at $695,000.
And while sometimes the real estate market seems to slow a little in July, that doesn’t seem to be happening this year. Homes that are well located, attractively presented and appropriately priced are continuing to sell briskly, often with multiple offers that push the selling price well above the listing price.
Home prices have now been rising for more than five years, fueled by low interest rates, a growing economy, and an extremely low inventory of houses for sale.
With job creation increasing and mortgage rates remaining low the pull toward homeownership is expected to continue. Yet housing starts have been drifting lower, and some are beginning to worry that a more serious housing shortage could be in the cards if new construction and building permit applications continue to come in lower in year-over-year comparisons while demand remains high.
Richard Green, director of the USC Lusk Center for Real Estate recently told the Los Angeles Times that developers would have to immediately erect 100,000 new homes in LA County for prices to stop rising and would then need to build an additional 35,000 each year. Last year, the county permitted just under 20,000 new homes, according to the Real Estate Research Council of Southern California.
And in some areas, there is very little room left to build. Long Beach and Lakewood, for example, are almost completely built out.
In Long Beach, June’s median home price was $619,000, up 5.8% from a year ago, according to Pacific West Association of Realtors (PWR). The number of new listings in June was down 7.5% from a year ago and the inventory of homes for sale was down 10.9%.
In Lakewood, the median home price was $560,000 in June, up 7.8% from 2016. Meanwhile, the inventory of homes was down by 5.1%, and the percentage of original list price received was 100.5%, up 1.7% from a year ago.