Southern California home sales rose to the highest level for the month of August in six years, fueled by low mortgage rates, a healthier move-up market and near-record levels of investor and cash buying. The median price paid for a home rose to a four-year high, lifted partly by the ongoing shift toward fewer foreclosure resales and more mid- to high-end deals, a real estate information service reported.
The median price paid for a home in the six-county Southland rose to $309,000 last month, up 1.0 percent from $306,000 in July and up 10.8 percent from $279,000 in August 2011, according to San Diego-based DataQuick.
Last month’s median price was the highest since the median was $330,000 in August 2008. The median has risen month-to-month for seven consecutive months and has increased year-over-year for the past five months.
Home prices have edged higher this year as greater demand, triggered by super-low mortgage rates and a mild economic recovery, has been met by a shrinking supply of homes for sale. But recent gains in the median sale price also reflect two other trends: a sharp drop in foreclosure resales, which often sell at a steep discount and are concentrated in lower-cost areas, as well as a substantial increase in mid- to high-end transactions.
It appears that close to half of the nearly 11 percent year-over-year gain in the Southland’s median sale price last month can be attributed to this shift in the types of homes selling. In August, price levels for the lowest-cost third of Southern California’s housing stock rose 13.1 percent year-over-year, while they rose 6.1 percent in the middle and 2.6 percent in the top third.
In August, a total of 22,438 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. That was up 9.0 percent from 20,588 sales in July, and up 14.2 percent from 19,654 sales in August 2011.
Last month’s sales were 15.6 percent lower than the average sales tally of 26,588 for all the months of August since 1988, when DataQuick’s statistics begin. The low for August sales was 16,379 in 1992, while the high was 39,562 in 2003.
“August was the strongest month for home sales so far this year, and the strongest for an August in six years. That’s really saying something given the drop in low-end sales, especially foreclosure resales. Much of the pickup in activity reflects a continuation of trends we’ve seen for months, like the unleashing of pent-up demand in move-up markets and high levels of cash and investor buying. It will be interesting to see at what point cash purchases, which still account for close to a third of all sales, start to fade. In the meantime, strong seasonal forces should be kicking in now. Absent an unusual surge in demand this fall, sales will taper off over the next few months,” said John Walsh, DataQuick president.
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