Great article from DQnews.com
La Jolla, CA—The Southland housing market continued its long, step-by-tiny-step trek back toward normalcy 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-county Southland rose last month to $295,000, up 1.7 percent from $290,000 in April and up 5.4 percent from $280,000 in May 2011, according to San Diego-based DataQuick.
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.
Last month’s total Southland sales rose nearly 21 percent compared with a year ago, and activity increased across the home-price spectrum. But the gains were strongest above $300,000. The volume of transactions in lower-cost markets has been restrained by, among other things, the dwindling inventories of homes for sale, especially foreclosures.
The number of Southern California homes sold in May for less than $200,000 rose 7.0 percent from a year earlier, while the number that sold for $200,000 to $400,000 increased 18.9 percent. Sales between $300,000 and $800,000 – a range that would include many move-up buyers – jumped 23.1 percent year-over-year. Sales over $800,000 rose 11.8 percent from May 2011.
“The market is being slowly nursed back to health by low interest rates, a modestly improved economy and, we suspect, a widening sense that the housing sector is at or near bottom. There’s still plenty of uncertainty swirling around out there. But it looks like more move-up buyers are concluding it makes sense in the long run to sell their homes now, even when it’s hard to swallow the price. The upside for many is a good deal on the next house, and the ability to lock in both a killer mortgage rate and a relatively low property tax base,” said John Walsh, DataQuick president.
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