Tuesday, June 15, 2010

LAT says home prices surge 22.5%

I was wondering when the stats would be out, so thanks, LA Times.  However, this week we're seeing a bit of a slow down in the areas where I work.  Hmm.

Southern California median home price surges 22.5%

The May increase to $305,000, compared with the year-earlier level, mostly reflects a rush by buyers to take advantage of federal and state tax incentives, MDA DataQuick reports. It's the first time in 20 months the figure has topped $300,000.

The Southland's housing market surged in May, with the median home price soaring 22.5% from its year-earlier level as federal and state tax incentives for buyers ignited sales, a real estate research firm reported Tuesday.

The median price hit $305,000, topping $300,000 for the first time in 20 months, according to MDA DataQuick of San Diego. That represented a 7% jump from April.

The increase in prices reflected less a jump in the actual valuation of homes than a continued shift in the region's sales mix, with fewer homes selling in the Inland Empire and an improvement in pricier markets in San Diego and Orange counties, DataQuick said.

The jump also reflected the steep decrease in the number of foreclosures, which tend to drag prices down because those homes often sell at a big discount.

A total of 22,270 homes sold in the Southland last month, a 7.2% jump from May 2009 and a 9.7% increase from April. Sales last month hit their highest level for a May since 2006.

MDA DataQuick reports its sales figures as contracts close, and the sales surge last month probably reflected a rush of buyers finalizing deals in anticipation of grabbing a federal tax credit for buyers.

The federal credit of up to $8,000 for first-time buyers and up to $6,500 for some current homeowners expired April 30, but those hoping to get the credit must close their deals by June 30. Experts worry that once the effects of the credits diminish, the sales pace will slow and prices could slump again, particularly if interest rates rise.

Also fueling the local market is a separate state tax credit for first-time buyers and those purchasing new homes. The California credit took effect May 1 and provides up to $10,000 over a three-year period for buyers who qualify.


Copyright © 2010, The Los Angeles Times

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