Southern California dwelling costs hit one other all-time excessive in December, capping a 12 months of sharp progress that left many first-time consumers pissed off whereas owners counted their fairness good points.
The six-county area’s median sale worth reached $697,500 final month, up 16.3% from a 12 months earlier, actual property information agency DQNews stated Friday. It marked the tenth time the median set a document in 2021, a frenzy pushed by low charges, millennial consumers and a need for extra dwelling house throughout the pandemic.
Some economists forecast that costs will rise once more this 12 months, however the will increase are anticipated to be smaller as affordability — already a difficulty for a lot of — turns into an growing barrier to homeownership.
Whether or not that occurs is one other query.
Stock is at rock-bottom ranges, which means consumers nonetheless should combat to get right into a home even because the market has cooled a bit in latest months.
In keeping with L.A. County information from Redfin, though fewer provides confronted bidding wars final month than in December 2020, 59.7% of provides nonetheless had competing bids within the last month of 2021.
Economists and actual property brokers blame the availability scarcity on quite a lot of components, together with an absence of latest development and owners who've locked in low mortgage charges and don’t wish to transfer in a aggressive housing market.
Traders are additionally consuming away at stock, accounting for a couple of quarter of Southern California dwelling gross sales, in accordance with John Burns Actual Property Consulting.
In all, there have been almost 30% fewer houses on the market in Los Angeles and Orange counties final month than a 12 months earlier, Zillow stated in a report Thursday.
“I put two listings on this week and appears like each will probably be in a number of provides,” stated Tregg Rustad, an L.A. actual property agent at Rodeo Realty.
One issue that would sluggish the housing market is rising mortgage rates of interest because the Federal Reserve dials again its straightforward cash insurance policies to fight inflation.
Traditionally low charges are one motive consumers have been capable of bid up the price of housing a lot within the final 12 months. As charges rise, individuals can afford much less.
This week, the typical fee on a 30-year fastened mortgage was 3.56%, up from 3.22% two weeks prior, in accordance with government-backed mortgage firm Freddie Mac.
For a purchaser of a median-priced home within the area with a 20% down cost, the distinction in charges means a month-to-month cost that can now be $105 greater than simply two weeks in the past, in accordance with a mortgage calculator from Redfin.
For now, any slowdown is hard to see clearly.
Southern California dwelling gross sales, as tracked by DQNews, fell 10% from a 12 months earlier.
The decline isn’t a mirrored image of waning demand, stated Selma Hepp, an economist at actual property information agency CoreLogic. Relatively, stock has dropped, and final month’s numbers are in contrast with December 2020, when there was an uncommon variety of gross sales as a result of spring lockdowns pushed demand into later months.
Hepp famous that final month’s gross sales have been nonetheless up 10% from December 2019 ranges.
CoreLogic forecasts L.A. County home-price progress will sluggish to the low single digits in 2022. Hepp stated if stock doesn’t meaningfully rise, that prediction could not pan out.
“We could as an alternative see the extension of this double-digit fee,” she stated.
Rustad, the L.A. agent, stated he has seen demand decide up after the vacations. There are extra new listings as properly, however it’s not “sufficient to maneuver the needle.”
“There have been so many consumers and so few homes all of final 12 months and that’s nonetheless taking place now,” he stated.
Right here is how dwelling gross sales and worth figures broke down by every county in December, in contrast with a 12 months earlier.
- In Los Angeles County, the median dwelling worth rose 15% to a document $805,000, whereas gross sales fell 5.8%.
- In Orange County, the median dwelling worth rose 17.6% to a document $935,000, whereas gross sales fell 17.5%.
- In Riverside County, the median dwelling worth rose 20.4% to a document $550,000, whereas gross sales fell 7.7%.
- In San Bernardino County, the median dwelling worth rose 21.4% to a document $485,750, whereas gross sales fell 10%.
- In San Diego County, the median dwelling worth rose 15.2% to $743,000, whereas gross sales fell 11.5%.
- In Ventura County, the median dwelling worth rose 15.5% to $751,000, whereas gross sales fell 23.1%.
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