SoCal Home Sales and Median Prices in October

Southern California home sales increased slightly over the year in October, edging up by 1.3% to 19,930 units (new and resale houses and condominiums). Although sales have now risen on year-over-year basis for nine months in a row, the October advance was the second smallest over that period coming in just ahead of February’s gain of 0.5%. After a comparatively strong summer, sales dipped more than usual from September to October, falling by 5.5% over the month.

The median price across Southern California increased by 5.6% over the year to October to $435,000 but was flat over the month. The median prices has now risen for 43 consecutive months on a year-over–year basis but remains 13.9% below the peak price reached in mid-2007. The share of sales for homes priced above $500,000 was 39.8% in October, up from 36.4% a year ago. The number of homes sold for $500,000 or more increased by 10.8% over the year, while sales for less than $500,000 were up by just 0.8%.

Sales remained constrained by the lack of inventory and declining affordability. More buyers of low- to mid-prices homes are turning to low down payment FHA loans for which the mortgage premium insurance was lowered this year. The increased use of these loans is contributing to the limited supply of homes in more affordable markets. These same markets have also experienced some of the sharpest increases in median prices. Meanwhile, although investor purchases have been trending lower, they are still above normal and tend to be in lower-priced areas, adding to demand. On the supply side, new home construction is still below historical levels and what is being built has been in the mid- to high-price range. This is understandable given high development costs, but it further exacerbates supply and affordability issues. 

Source:  http://www.corelogic.com/solutions/configurable-real-estate-data-reports.aspx/