A dearth of inventory has driven home prices up and home sales down in Southern California. The median sales price for homes in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties rose to a six-year high of $400,000 in March.
That was up 4.4% from $383,000 in February and up 15.8% from March 2013. That marked the highest median sales price since it was $408,000 in February 2008, according to data released by DataQuick.
The median sales price has risen on a year-over-year basis for 24 consecutive months. Despite the rising costs, the March median sale price was still 20.8% below the peak $505,000 median in spring/summer 2007.
The high costs are driving the number of sales to a six-year low. There were a total of 17,638 new and resale houses and condos sold in the Southern California area in March. Those figures were up 25.7% from February, although that increase is typical for the area.
March 2014’s figures were down 14.3% from 20,581 sales in March 2013 and were the lowest for March since 12,808 homes sold in March 2008.
“Southland home buying got off to a very slow start this year, with last month’s sales coming in at the second-lowest level for a March in nearly two decades,” said DataQuick analyst Andrew LePage.
“We see multiple reasons for this: The inventory of homes for sale remains thin in many markets. Investor purchases have fallen. The jump in home prices and mortgage rates over the past year has priced some people out of the market, while other would-be buyers struggle with credit hurdles. Also, some potential move-up buyers are holding back while they weigh whether to abandon a phenomenally low interest rate on their current mortgage in order to buy a different home.”
The home price increase is consistent throughout the home price segments. In March, the lowest-cost third of the region's housing stock saw a 21% year-over-year increase in the median price paid per square foot for resale houses. The annual gain was 15.9% for the middle third of the market and 14.3% for the most-expensive third.
The cost increase is seriously impacting homebuyers looking for homes below $500,000. Sales below $500,000 fell 26.4% year-over year, while sales below $200,000 plummeted 45.7%.