Record prices in 5 of 6 counties – San Bernardino Sun
The fierce completion of a limited supply of homes has fueled strong sales and driven prices to record highs as the busy home buying season in the spring of this year has all but erased the memory of the coronavirus crash in the market. one year ago.
Seven months after the start of a new market boom, desperate buyers in Southern California are buying homes without exit strategies such as financing and contingency-based home inspections, agents say.
“It’s a tough market for buyers,” said Kathy Clark, a Pacific Realty agent in Covina. “I had a couple who gave it all up. They gave up on termites (repairs), inspections and came to ask too much.
The median price of a Southern California home – or the price in the middle of all sales – climbed 14.5% to a record $ 630,000 in March, according to figures released Wednesday April 21 by DQ News / CoreLogic. It was the region’s seventh median record in the past 13 months.
Los Angeles, Orange, Riverside, San Bernardino and San Diego counties also posted record prices in March. In LA County, prices jumped $ 110,000, or 17.2%, from March 2020 to last month’s median of $ 750,000.
Sales, meanwhile, climbed to 24,885 transactions, up 32.2% from March 2020 to the second highest level in nearly three years – and the highest since March in 15 years.
In an extreme example of buyer demand, a three-bedroom house in Covina that sold for $ 650,000 had 126 visits and secured nearly 50 offers in just four days. Listing agent Crystal Wang of Re / Max 2000 Realty said these included all-cash offers, a contingency waiver and an offer for $ 100,000 above asking price.
Demand is high for the remodeled home because of its location and because it is affordable for most entry-level buyers, Wang said.
She’s sold out after spending most of a day and a half of the night knocking down offers for the last eight, all for at least $ 60,000 more than asking price.
“I don’t really like this market,” Wang said. “It’s too crazy. I am very sorry for these buyers and their agents. We only have one house for sale and they take their time (bidding). “
Selma Hepp, deputy chief economist at CoreLogic, said much of the current demand stems from the pandemic-induced desire for more indoor and outdoor space, as well as the accelerated timeline of millennia to purchase their first. or larger house in a suburb.
Low mortgage rates have also increased the purchasing power of home buyers. The rates on a 30-year fixed-rate mortgage were on average 2.88% in the three months ending in March, down from 3.51% a year earlier. This translates into a purchasing power of 8% more. For example, someone who put in 20% less would pay only $ 113 more per month for the house at the median price today than they would have done a year ago – despite a price gain of $ 80,000.
“You won’t get a better financing deal than you are now,” said Scott Wild, vice president at Irvine-based John Burns Real Estate Consulting.
At the same time, the number of homes for sale remains at the lowest level for years. The area had 36,241 homes for sale in February, up from 49,000 a year earlier, according to Zillow.
The enrollment-to-sales ratio is at its second lowest level since April 2004, according to figures from the California Association of Realtor.
“The sharp price increases continue to be driven by an ever-declining inventory of homes for sale,” Hepp said. The inventory in some regions “is still only half of the levels they were before the pandemic”.
Desperation has led some buyers to cover neighborhoods with postcards and flyers asking, “Can I buy your house?”
Anaheim’s Aaron and Andrea Cunningham sent over 3,200 postcards over the past weekend to 17 neighborhoods in Orange, North Tustin and Anaheim Hills after being outbid on at least 10 homes in the four or last five months. They haven’t been able to compete with the number of cash offers sellers are receiving, they said.
“Investors and pinball guys are constantly beating us up in search of our forever home,” the mother of two girls and one boy, ages 5-11, wrote. “Please consider my family the next time the sale of your home crosses your mind.”
Each rejection has been a blow after they have already visualized their family in a house they have made an offer on, Andrea Cunningham said Wednesday. Her husband, Aaron, said he saved most of his life for a down payment.
“You have to walk through the fog and stand out,” he said of his decision to spend around $ 1,500 printing and mailing postcards featuring a family portrait. “I thought it would be like a Hail Mary effort.”
Wild said the Cunninghams aren’t the only buyers to be beaten by investors.
About one in five Southern California homes sold in 2020 was bought by an investor primarily looking for rental properties, he said, adding that the pace of investment purchases was likely to remain about the same this year. .
Unlike other parts of the country where institutional buyers like pension funds, iBuyers, and real estate investment trusts dominate, most of the competition from investors in Southern California comes from smaller, parent companies and businesses. pop due to high house prices in the area.
The number of investor purchases ranged from 18% in Orange County to 21% in Los Angeles and 23% in the Inland Empire, Wild said, surpassing investor sales share during the bubble years. speculative from 2005-08.
“It’s become a popular thing to think of real estate as a safe haven for funds,” Wild said. People looking to beat inflation are starting to think that “maybe the stock market is a little foamy” and the amount of federal stimulus has increased the risks of higher inflation going forward.
Prices are expected to continue rising for next year, with weaker appreciation in 2022, the researchers say.
Wild’s firm, John Burns Real Estate Consulting, predicts that existing home prices will rise 12% nationwide this year.
CoreLogic’s HPI forecast predicted gains ranging from 5% in Los Angeles to 10% in Anaheim and 11% in San Diego by next February.
“It’s really hard to imagine home prices going down at this point,” Wild said. “The demand is so high and the supply has (been so tight).”
Here’s a breakdown of median prices and sales by county:
- Los Angeles County: Record $ 750,000, Up 17.2%; sales amounted to 7,618, an increase of 33.9%.
- Orange County: a record $ 835,000, up 10.6%; sales amounted to 3,895, an increase of 38.5%.
- Riverside County: a record $ 476,750, up 17.9%; sales totaled 5,016, up 37.5%.
- San Bernardino County: a record $ 429,500, up 18.3%; sales amounted to 3,234, an increase of 29.3%.
- San Diego County: Record $ 680,000, Up 15.3%; sales amounted to 4,112, an increase of 22.4%.
- Ventura County: $ 658,000, up 12.5%; sales amounted to 1,010, an increase of 24.2%.
– Jonathan Lansner, SCNG Business columnist, contributed to this report.