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(Daily Breeze) - Sales of existing homes in California hit their highest pace in nearly four years in June — despite extremely tight inventories — and prices continued to rise.
That’s the upshot of a report released Monday by the California Association of Realtors.
The report shows that existing, single-family home sales totaled 443,150 in June, up 3.3 percent from May and up 2.4 percent from a year earlier. The state’s median home price likewise rose 0.9 percent to $555,150 from the previous month, and it was up 7 percent from $518,830 in June 2016.
“A lack of available homes for sale continues to be the largest single factor influencing California’s housing market,” CAR President Geoff McIntosh said in a statement. “With active listings 13.5 percent lower than last June, we’ve now experienced a full two years in which active listings have fallen on a year-over-year basis and the lowest inventory level this year.”
McIntosh said many would-be sellers aren’t listing their homes because there aren’t a lot of available properties out there for them to buy when they move.
SOUTHERN CALIFORNIA’S TREND
Los Angeles County saw its median price for an existing single-family home rise 11.4 percent in June to $548,220, a 9.2 percent increase from a year ago. Sales were up 8.2 percent from May and up 8.5 percent from June 2016, CAR reported.
“The inventory of available homes feels tight, but the interest from people who are looking to buy homes is very robust,” said Mel Wilson, broker and owner of Mel Wilson & Associates Realtors in Northridge. “The big concern is supply. Prices will keep going up, but it’s at a rate that is unsustainable.”
SELLERS ALSO FACE CHALLENGES
On the flip-side, Wilson said sellers in the Antelope Valley are grappling with FHA appraisals that often undervalue the worth of their homes by as much as $10,000 to $15,000. Those estimates, he said, simply haven’t caught up to the reality of the market.
“When someone gets an FHA appraisal, that appraised price is locked in for six months,” he said.
San Bernardino County’s month-to-month increase for a median-priced home was far smaller, at just 0.8 percent. But the county saw a 12 percent year-over-year increase, bringing its median home price for June to $274,330.
Sales increases were well into the double digits. The county saw a 15.5 percent uptick in June and annual sales rose 13.4 percent.
Riverside County’s median price rose 2.7 percent in June to $385,000. That was up 6.9 percent from a year earlier. Home sales in the county were up 6.6 percent in June and up 8.7 percent year-over-year.
ORANGE COUNTY TRENDING MUCH HIGHER
Orange County’s median home price remained flat in June but it was considerably higher than surrounding counties at $795,000. That was up 5.4 percent from a year earlier, and sales in the county rose 4 percent in June and 5.6 percent on an annual basis.
Southern California and the state as a whole are vastly under supplied with available homes, Wilson said. But it’s unlikely that builders will catch up with the demand anytime soon.
“There is such a big lag time between when a developer puts money down and ties up the land to when they can get the entitlements to begin building,” he said. “And the city of Los Angeles is seriously considering adding $12 per square foot to residential construction in the city. That is money they want to put into an affordable housing trust fund. But that would just make homes more unaffordable.”
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