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SoCal home sales, prices jump in June

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Southern California home sales rose 18.1 percent from a year ago, while home prices also continued to rise, by 5.7 percent to $442,000.

New data released by CoreLogic shows that a total of 24,378 new and existing houses and condominiums were sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in June, up 12.1 percent from May. June sales reached their highest level in nine years.

The year-over-year gains in Southern California home sales over the past five months mark the longest stretch of year-over-year sales gains since the first half of 2013, CoreLogic said.

“Southern California’s June home sales were the highest since summer 2006—the tail end of the last housing boom—and sales haven’t risen this sharply on a year-over-year basis in nearly three years,” said Andrew LePage, research analyst with CoreLogic. “Continued job growth, low mortgage rates, more confident consumers and other factors have put more wind in the housing market’s sails.”

June’s median sales price of $442,000 was up 2.8 percent from $430,000 in May 2015. Although the median home price was the highest for any month since October 2007 when it was $445,000, June’s figure is still 12.5 percent below the peak median price of $505,000 reached in March, April, May and July of 2007.

Silver Lake/ Los Feliz

Midyear Report: The Housing Market Is on Track for Its Best Year Since 2006 (and It Ain’t a Bubble)

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As we approach the midpoint of 2015, the residential real estate market is on track for its best year since 2006, the peak of the housing bubble. (This time, though, it’s no bubble.)

Job growth is powering the surge in demand for homes. More than 3 million jobs have been created in the past 12 months. And more than 1 million jobs have been created for 25- to 34-year-olds, the age range in which most Americans buy their first home.

We’re seeing record traffic at®. Real estate websites across the board are experiencing 15% year-over-year growth in unique users, but our site has seen more than twice that (perhaps thanks to Elizabeth Banks?). The vast majority of our visitors report that they intend to purchase a home.

With rising demand, homes are selling more quickly, too. In May the median age of inventory (homes on the market) nationwide was 66 days—that’s 8 days faster than for last year. The hottest markets are seeing inventory move 18 to 45 days faster.
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A rapidly declining age of inventory signals that demand is growing more rapidly than supply. Indeed, we’ve had 32 months in a row of existing-home inventory at less than a six months’ supply. That’s why we’re also seeing above-normal price appreciation.

Year-over-year median home price appreciation reached 9% in April, which has helped existing homeowners see strong gains in equity.

That level of price appreciation would be problematic if it continued, but we don’t think it will. Median list prices, which often predict the direction of actual price changes, moderated in each of the past two months as the number of listings grew.

Meanwhile, rents are increasing at a similar or even stronger pace than home prices. Record numbers of renting households have driven down apartment vacancies, and low vacancies led to higher rents. As a result, it is cheaper to buy rather than rent in 80% of the counties in the U.S.

And now the clock is ticking as mortgage rates are on the rise. With strong employment data in April and May, the average 30-year fixed conforming mortgage rate broke through the 4% level, and in the past week moved above 4.10%.

Is that slowing down demand? No, just the opposite. Consumers can clearly see that affordability is going down for real, so those who are ready and able to buy are searching for homes, looking at listings, visiting open houses, applying for mortgages, and signing contracts.

In April, new-home sales were up 26% over last year. Pending home sales, which are new contracts on existing homes, were up 14%.

At this level of growth, total home sales in 2015 could come close to 6 million, which is a level comparable to 2007 (if not quite at the level of peak 2006). But 2007 was a year of decline for the housing market, whereas in 2015, we’re expecting more good things to come.

Strong Sales

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While single family housing starts are up 6.7% year-to-date and single family permits are up 7.5% year-to-date, new home sales are up a staggering 24%! This means that what’s being built is changing. Specifically relatively fewer custom homes and more spec homes are being built. To wit, first-time buyers accounted for 32% of existing home sales in May, their highest level in 32 months. First-time buyers may finally be returning.

Existing home sales hit highest level since 2009

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Sales of existing homes jumped to their highest level in nearly six years in May, according to the National Association of Realtors.

The 5.1 percent increase in May brought sales to a seasonally adjusted annual rate of 5.35 million. That’s 9 percent above the pace a year ago. Included in this total are sales of single-family homes, townhomes, condominums and co-ops.

“Solid sales gains were seen throughout the country in May as more homeowners listed their home for sale and therefore provided greater choices for buyers,” said NAR Chief Economist Lawrence Yun.

“However, overall supply still remains tight, homes are selling fast and price growth in many markets continues to teeter at or near double-digit appreciation,” he said. “Without solid gains in new home construction, prices will likely stay elevated — even with higher mortgage rates above 4 percent.”

The median price for an existing home was $228,700, nearly 8 percent above what it was a year ago.

The number of first-time buyers rose to 32 percent, the highest level since September 2012.

That’s an “encouraging sign,” Yun said, “and is the result of multiple factors, including strong job gains among young adults, less expensive mortgage insurance and lenders offering low downpayment programs,” he said.