Declining interest rates boosted sales of existing homes in California to a five-year high during December while the median price of those homes climbed to the highest level since 1979, the California Assn. of Realtors said Monday.
"The market is more active now than it has been in a long time," said Richard J. Rosenthal, a Venice-based realtor who is president of the trade group.
Home resales in December reached an annual rate of 482,941 units on a seasonally adjusted basis in the state--up 27.1% from the November pace of 379,900 units and up 18.2% from the December, 1984, level of 408,588, the association reported. December was the sixth consecutive month of year-to-year increases in resale figures, the group said.
In the Los Angeles area (slightly larger than the county), December resale activity, as measured by a sample, rose 24.2% from year-ago levels but dropped 7.1%, compared to November.
Orange County's December resales rose 1.7% from December, 1984, but were down 15.6% from November. In San Diego, December resale activity slipped 5.9% from December, 1984, but was up 4.9% from November.
Statewide, the median price of existing single-family homes sold in December was $123,913, a 3.1% increase from $120,231 in November and a 12.3% jump from $110,305 in December, 1984.
The association said the price increase indicates that many buyers are "trading up" by purchasing larger and more expensive homes.
Rosenthal noted that inflation and household incomes are not moving up at the same rate as home prices. As a result, the number of households that will be able to afford the average home will decline, he said.
In the Los Angeles region, the median home price in December was $120,682, up 6.8% from $112,962 in December, 1984. Orange County's median price rose 11.2% to $144,154 from $129,647, and San Diego's median price increased 6.5% to $108,201 from $101,643.