The median price of homes in Southern California rose sharply in October
The median price of homes in Southern California rose sharply in October from a year earlier, as buyers rushed to take advantage of lower interest rates.
The six-county region’s median price of $ 605,000 was down slightly from a record high of $ 610,000 in September, although it is not unusual for prices to fluctuate from month to month. The median was up 14.2% from the previous year.
Economists and real estate agents say the housing market is hot because of the COVID-19 pandemic.
Many people who still have jobs want more space, and federal policy to stimulate economic growth has helped bring average interest rates on a 30-year fixed mortgage below 3%.
This brings more people into the market and allows them to pay more than they otherwise could. Sales in October were up 17% from the previous year, according to DQNews, which released sales and price figures on Wednesday.
Selma Hepp, deputy chief economist at CoreLogic, said much of the surge in demand came from millennials entering their 30s and ramping up their purchasing plans due to the pandemic.
“The way people think about it is, ‘If not now, when? ”, Said Hepp.
And as people venture into the market, they find fewer homes for sale than last year and push the prices up.
Although the median price in six counties last month was slightly lower than the September record, prices in Los Angeles and San Bernardino counties hit all-time highs in October, while San Diego hit a record high.
The regional median is up double digits from a year ago – the third consecutive month of such large increases.
Jordan Levine, assistant chief economist at the California Assn. of Realtors, said he expects continued “strong price growth” given the mismatch between supply and demand.
But he and other experts warn that values are not rising as much as the large median increases indicate.
Because the median is the point at which half of homes sold for more and half for less, it also reflects a change in the types of homes sold.
One thing that has caused the median price to rise so much in recent months is that members of higher income households are less likely to have lost their jobs during the pandemic, resulting in a larger share of home sales being in the luxury segment now than at the time. around the same time last year.
Here’s how home prices and sales changed over the past month in Southern California’s six counties.
- In Los Angeles County, the median home price rose 15.3% from the previous year to $ 715,000, while sales climbed 11.2%.
- In Orange County, the median price rose 10% to $ 795,000, while sales climbed 23.7%.
- In Riverside County, the median price rose 14% to $ 445,500, while sales climbed 17.8%.
- In San Bernardino County, the median price rose 14% to $ 400,000, while sales climbed 17%.
- In San Diego County, the median price rose 13% to $ 650,000, while sales climbed 22.9%.
- In Ventura County, the median price rose 12.9% to $ 655,000, while sales climbed 12.4%.
Stuart Gabriel, director of UCLA’s Ziman Center for Real Estate, said he expects the housing market to heat up further in the new year.
Not only has the Federal Reserve signaled that it will continue its easy money policy, but Gabriel also considers economic stimulus packages to be more likely under the new Biden administration than under the Trump administration.
“There will be more demand for housing,” he said.