Regardless of the pandemic, Southern California house rates rebounded in July for a second straight month, with medians at all-time highs in 4 out of 6 counties.
This time, sales revived, too, increasing to the greatest level for any month in 2 years, according to new real estate data from CoreLogic/DQ News.
The typical rate of a Southern California house, or rate at the mid-point of all sales, was $585,000 in July, up 8.5% year over year and up nearly $30,000 from June’s record high. That’s the most significant one-month rate jump in CoreLogic’s 32-year-old database.
Los Angeles, Orange, Ventura and San Diego all saw record house rates. Riverside and San Bernardino counties were at their second-highest levels, just except records embeded in late 2006.
And after three straight months of drastically plunging house sales, transactions in July rose 2.5% from year-ago levelsto 22,656 homes offered.
That’s nearly double the number of sales in May when buyers and sellers avoided the market under stay-at-home orders.
The sales rise occurred in spite of a paucity of homes on the market.
Southern California had just under 26,600 homes on the market since Aug. 6, a seven-year low, figures from Reports On Real estate show. By comparison, the region had nearly 20,000 more homes for sale a year earlier. Even though listings dropped 41%, sales contracts still jumped 21%.
The gains was available in the face of major economic turmoil brought on by the coronavirus pandemic. More than 22 million Americans lost their jobs in the after-effects of lockdowns last March, and the gdp fell more than 30% in the first quarter. Even with 9.3 million individuals rehired as the economy began to reopen in current months, U.S. work still is off by about 60%.
How can the real estate market be soaring?
The response, said Danielle Hale, chief financial expert for Realtor.com: “Strong levels of need. Minimal stock. Along with low mortgage rates assisting individuals stay in the market in such a way the majority of people are shocked by.”
Freddie Mac reported the rate for a 30-year set mortgage averaged 2.99% for the week ending Thursday. Rates have been under 3% five of the previous 6 weeks, “moving customer need and making it possible for a rate rise,” Hale said in a current online video.
In addition, CoreLogic and state Realtor financial experts said, higher-priced house sales are up considerably compared with last summer season, shifting rate averages even higher.
“At the same time, higher sales are reflecting much of the suppressed need that was missed out on in the conventional spring home-buying season and improvement in price arising from traditionally low mortgage rates,” said CoreLogic Deputy Chief Financial Expert Selma Hepp.
On the other hand, a lot of the out of work are primarily in the rental market, Hepp included. As an outcome, rents are softening just as house rates are increasing.
Frank Kashou of Long Beach, an IT service technician who sells real estate on the side, usually just makes three or 4 sales a year. He currently hit that mark last month. However his buyers are having a tough time negotiating since they kept getting outbid. One couple trying to buy a house in Lancaster needed to make 6 offers prior to lastly getting one accepted, he said.
“We ‘d put in a deal, and there were 6 offers ahead of us,” Kashou said.
Norco-based agent David Sanchez is having similar issues discovering homes for customers in the Inland Empire. He’s even had customers getting outbid in Hesperia, 80 miles northeast of downtown Los Angeles.
Riverside and San Bernardino counties are being flooded with house buyers from Los Angeles who are seeking more space after being locked in their houses for months.
“With this new work-at-home, you can live 2 hours away and be on Zoom,” Sanchez said. “Why are you going to pay $3,000 a month for a home in L.A.? … They want space. They want a back yard. A location to put in a zoom or a health club room. The money’s currently there. They’re paying leading dollar for lease.”
Here’s a breakdown of sales and rates by county:
- Los Angeles: 6,818 homes offered, down 2.3%. Mean rate: $670,000, up 5.5%.
- Orange: 3,450 homes offered, up 6.7%. Mean rate: $775,000, up 6.3%.
- Riverside: 4,054 homes offered, down 0.4%. Mean rate: $430,000, up 9.1%.
- San Bernardino: 3,057 homes offered, up 8.1%. Mean rate: $375,000, up 9.8%.
- San Diego: 4,253 homes offered, up 6.6%. Mean rate: $634,000, up 9.3%.
- Ventura: 1,024 homes offered, up 2.6%. Mean rate: $635,000, up 6.7%.