Workers build a home in Rancho Santa Fe, Calif. Home prices are now posting… (Sam Hodgson / Bloomberg )
The Southland’s housing market kicked off the new year with a sharp annual gain in home sales last month — the highest volume for a January in six years — as investors and cash buyers proliferated.
The region’s median home price notched a sharp 23.5% gain from the same month a year earlier, a reflection of both rising prices and a shift in the buying mix from lower-end starter homes to pricier digs. Buyers paid a median $321,000 last month, real estate firm DataQuick reported Wednesday.
The Southern Californial rebound came as foreclosure starts statewide took a massive 77.7% tumble over the same period, according to a separate report.
“This fledgling housing recovery has momentum,” DataQuick President John Walsh said in a news release. “Already, price hikes have caused some to question whether it's sustainable, whether it's a 'bubble.' Let's not forget, though, that we're still climbing out of a deep hole from the housing downturn.”
Nevertheless, the fact that the housing market is being fueled by low mortgage interest rates and investor interest is cause for concern, Walsh noted. Healthier engines for housing growth such as employment gains and consumer confidence are playing less a factor.
On Tuesday, the real estate website ForeclosureRadar.com reported a 60.5% decline in the number of default notices issued in California in January compared with December. The number of default notices — the first formal step in the state’s foreclosure process — that were issued fell 77.7% from January 2012. A total of 4,500 such filings were logged last month, the lowest number since at least September 2006, when the website’s records begin.
The website gave no explanation for the sharp decrease in notices of default, but noted that the drop coincided with a package of tough new laws that provide homeowners with some of the nation's strongest protections from bank repossession practices taking effect in January.
The falling supply of repossessed homes on the market should continue to put a floor on prices and boost the number of regular sales. That should help lift more borrowers out of negative equity positions, helping them to sell out of problematic loans and burdensome homes.
Last month a total of 16,058 new and previously owned houses and condominiums sold in the Southern California region, made up of Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura counties. That was a 20.8% drop from December, though such a decline is normal for the season, according to DataQuick. Indeed, the sales tally in the Southland last month was the highest month for a January since 2007.
Sales of homes in the region’s move-up market have continued to gain. Sales of homes priced between $300,000 and $800,000 soared 49.6% year-over-year in January while sales of homes costing more than $500,000 jumped 74.0% from the same month a year earlier.
Sales of homes in more affordable neighborhoods declined, an indication of tight inventory levels in those markets as investors look to snap up houses and rent them out. Sales of homes that cost less than $200,000 fell 23.5% year-over-year.
Foreclosed homes made up just 15% of the resale market last month, down dramatically from the worst of the crash when they hit a high of 56.7% of the market in February 2009. Short sales made up an estimated 25.9% of the resale market last month.
Investors and cash buyers were once again a prominent part of the market. Absentee buyers bought a record 30.7% of all homes sold last month while buyers paying cash snapped up 34.9% of all sales.
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