Earlier in the year Barry Ritholtz over at The Big Picture had a series of articles looking at housing and the case, or lack thereof, for housing bubbles - The Growing Risk of Housing 'Bubblettes' started it off. Barry's attention was drawn by a report from a mortgage company that claimed about 1/5th of the nation had areas in which the price of the housing stock was at a 20% or greater premium. And he concluded the brief with the reminder that overvaluation in markets presents a risk of future declines. 8 of the top 10 were cities in California, Las Vegas and W. Palm, Florida were the others.
Those who live and work in California would not find the information above surprising, though it is a bit depressing if you are trying to become a homeowner. This week DataQuick Real Estate News released the results of their monthly survey for the southern California area. Prospective home owners will be even unhappier:
- 35,454 new and resale homes were sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in June, up 14.8 % from May (about 2% above last June's numbers). And it is the highest sales count ever recorded.
- A new record for the median priced home in southern California was reached last month at $465,000, up a bit from May but 14.5% above June 2004. Year-over-year price changes peaked the month before at 26.9 %.
- 50 consecutive months of double digit price increases in San Diego County, though last month's increase was ONLY 6.3%. San Bernardino County has seen double digit increases since mid 2002. Last month prices increased over 30%.
- The monthly mortgage payment for home buyers was $2,021 in June, up over last year but on an inflation adjusted basis still lower than their peak payments last time the market was frothing - 1989.
- Signs of market distress are absent - foreclosures bottomed out, down payment size stable, flipping rates and non-owner occupied buying activity unchanged.
Los Angeles 2005 homes sold 12,001, unit increase over 2004 2.8%; median price $475K, 14.7% over 2004.
Orange County 2005 homes sold 4,898, unit increase over 2004 3.1%; median price $603K, 11.7% over 2004.
San Diego 2005 homes sold 5,663, unit increase over 2004 -8.8%; median price $493K, 6.3% over 2004.
Riverside 2005 homes sold 6,485, unit increase over 2004, 2.2%; median price $393K, 23.2% over 2004.
San Bernardino 2005 homes sold 4,700, unit increase over 2004, 9.5%; median price $322K, 30.9% over 2004.
Ventura 2005 homes sold 1,707, unit increase over 2004, 16.4%; median price $584K, 16.8% over 2004.
So. California 2005 homes sold 35,454, unit increase over 2004, 2.1%; median price $465K, 14.5% over 2004.
Details here: Southland Real Estate Market Hits New Highs. Perhaps some who have tired of waiting for this particular bubblette to deflate will end up rooting for the Jazz. And it isn't just in the southern end of the state. A couple of hundred miles up the coast the median price paid for a Bay Area home was $595,000 in May, a new record. That was up 1.5 percent from the month before and 17.6 % from 2004.