Is it too early too call a bottom for the Southern California home market? Maybe not. The trend towards higher median sale price and increased sales volume that began a couple of months ago is continuing.
Southern Californians are shopping for homes again, optimistic that values have been beaten down about as low as they will go and triggering the highest sales levels in more than two years.Most of the activity is concentrated in the entry-level segment of the market, where bidding wars for properties priced $500,000 and under are becoming commonplace. And much of this market consists of foreclosed (REO) properties, which are typically priced aggressively low, in part to sell quickly so banks do not have to manage this inventory.
A report released Tuesday shows a sharp rise in home purchases and an increase in median prices for a third straight month -- suggesting that the two-year decline in home values may finally be over.
In Los Angeles County, the median home price hit $321,000 last month, after lingering at $300,000 for most of the year. [Los Angeles Times]
But there are signs that even the high-end market is showing signs of resilience: Malibu, Beverly Hills and Brentwood all showed sales increases over July of last year.
With a large backlog of foreclosures still to hit the market, this brisk sales activity could continue for some time to come. In July, there were 125,000 foreclosures in California scheduled to hit the auction block, nearly twice as many as during July of last year.
With new declines in interest rates, expect the hotly contested lower segment of the market to remain overheated. This may be bad news for buyers who lose out in competitive multiple-offer situations – but a welcome sign of health for the overall residential real estate market.