Great news on the Home Sales Front!
Southern California home sales gain ground
It’s the fourth consecutive year-over-year sales gain, said Irvine-based CoreLogic. Prior to this uptick, sales
had fallen from the year-ago level for 11 of the past 12 months.
During May, sales of new and previously owned homes and condominiums in the six-county region increased from 20,627 a year ago to 21,644, CoreLogic said.
But sales last month were 14 percent below the May average of 25,297, dating back to 1988 when record-keeping began.
“It’s slow going, but in many ways, the housing market continues to edge back toward normalcy with fewer distressed property sales and fewer investor and cash purchases,” said Andrew LePage, a research analyst with CoreLogic.
“While home sales remain sub-par, they’ve been trending closer to long-term averages. Job growth and other factors suggest we should see solid housing demand. But in the wake of the Great Recession and years of weak income growth, many would-be home buyers are struggling with affordability and credit hurdles.”
The median price continued the trend of modest gains, rising 2 percent from a year ago to $426,000, the smallest annual price gain in three years, CoreLogic said.
“Home price gains continue to run at much lower levels than a year ago, when most counties logged double-digit annual increases in their median sale price,” said LePage.
Homes of $500,000 or more accounted for 39.5 percent of all sales in May 2015, up from 38 percent a year earlier. It was the biggest market share for this price point for any month since November 2007, when it was 40 percent.
Sales were weakest in Los Angeles County last month, rising 1 percent from a year ago, to 7,153 transactions. The median price rose 5 percent from a year earlier, to $485,000.
In San Bernardino County, sales increased 3 percent to 2,494, and the median price increased 5 percent, to $255,000. But scant inventory continues to be a drag on sales, and it appears that will persist into the summer.
“So far we haven’t seen the inventory response people hoped for and expected. Maybe home values need to ratchet up a bit more to convince people to sell,” LePage said. Bargain-priced properties continue to be rare finds.
Last month, foreclosure sales accounted for 4 percent of the total, compared with 5 percent a year ago, CoreLogic said. Short sales accounted for 4 percent, down from 5 percent a year ago.
Absentee buyers — mostly investors — bought 22 percent of all the homes sold in May, down from 24 percent a year earlier.
Cash buyers accounted for 23 percent of May sales, a drop of 27 percent from a year earlier.
Robert Kleinhenz, chief economist at the Los Angeles County Economic Development Corp., said the market is playing out as expected, with modest improvement over a year ago.
“We are moving in the right direction, but we are still constrained by a low supply of homes. It’s pretty remarkable we have not seen the floodgates open by any means on the supply side,” he said.
“And while we’re seeing some increase in new home construction, it’s still well below a normal level of activity.”
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