Southern California home prices increased in January from the previous year as buyers competed over a limited supply of homes for sale across the six counties. The area’s median price came in at $533,000, which was 6.6% higher than in January of 2019, and is the latest indication that the buyer’s market of 2019 is transitioning into a seller’s market in 2020.
Experts contribute the rise to declining mortgage rates and the shortage of homes for sale. Southern California had 17% to 28% fewer homes on the market in January than the previous year with similar declines in December. With lower mortgage rates, owners are less likely to list their homes for sale with home construction also declining. Despite the less amount of homes on the market, sales in the six counties rose 17.8% in January from a year ago. The average rate on a 30-year fixed mortgage is 3.49%, which is down from 4.35% from a year earlier. The decline would save a buyer $210 on a monthly mortgage payment for a $533,000 median price home. With the decline of mortgage rates and a rise in income, housing is actually more affordable than the previous year. In the fourth quarter of 2019, 27% of Los Angeles County households could afford the median-priced single-family residence as opposed to 24% from a year earlier.
The following is how home prices and sales rose in all six counties compared to a year earlier:
- The median sale price rose 6% to $615,000 and sales climbed 14.1% in Los Angeles County.
- The median sale price rose 6.7% to $747,000 and sales climbed to 20.3% in Orange County.
- The median sale price rose 4% to $390,000 and sales climbed 18.3% in Riverside County.
- The median sale price rose 12.5% to $360,000 and sales climbed 16.7% in San Bernardino County.
- The median sale price rose 7.9% to $585,000 and sales climbed 22.8% in San Diego County.
- The median sale price rose 3.2% to $588,500 and sales climbed 18.8% in Ventura County.
Real estate agents are saying that open houses are busy with offers more than $20,000 over the asking price. However, home owners may currently be reluctant to list their houses as they may not want to miss out in future price gains. Prices are expected to keep rising, but there is expected to be a ceiling at some point.
Source: Los Angeles Times