Southern California's housing market continued to gain traction last month as the region's median home price rose by more than 16 percent, home sales grew by 25 percent and foreclosure resales hit a five-year low.
Though the region's median home price held steady at $315,000 from September to October, it was up 16.7 percent from the year-ago price of $270,000, real estate tracker DataQuick reported Tuesday.
Housing sales in the six-county area - which includes Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura counties - showed an even bigger gain.
A total of 21,075 new and used Southland houses and condos were sold last month. That was up 18 percent from September and up 25.2 percent from October 2011.
Home sales have been boosted by higher demand as a result of ultra-low mortgage rates and a dwindling inventory of homes.
Bob Lieffring, a Realtor and co-owner of Coldwell Banker Vista Realty in Valencia, can attest to the latter.
"When you count the city and unincorporated county areas, Santa Clarita has a population of about 200,000," Lieffring said. "At any given time, we might see 300 to 350 properties for sale at any price point for that entire population base. That might sound like a lot, but our normal inventory would be closer to 1,500 to 1,800 properties. So we're at about a fifth or a sixth of normal inventory."
Competition for homes has become stiff, according to Lieffring.
"Multiple offers is the norm," he said. "And prices are being bid up over asking prices."
Riverside County posted the biggest annual price gain last month. Its median home price hit $220,000 in October, a 17.6 percent gain from $187,000 a year earlier, according to DataQuick.
That was followed by L.A. County at $341,000 (up 13.7 percent), San Bernardino County at $170,000 (up 13.3 percent), Orange County at $455,000 (up 12.3 percent), San Diego County at $350,000 (up 11.1 percent) and Ventura County at $360,000 (up 7.5 percent).
The market is also seeing a big change in the types of homes that are selling. Discounted foreclosures now account for a smaller share of sales, while move-up homes are a larger share, putting further pressure on the median price.
"With interest rates between 3 percent and 3.5 percent, money is cheap," said Marty Rodriguez, owner of Century 21 Marty Rodriguez in Glendora. "It's now cheaper for many first-time buyers to buy than to rent."
Rodriguez agreed that inventories of bank-owned properties are down. Many lenders, she said, are focused more on short sales, which is when a lender accepts less money than is owed on the balance of a mortgage loan.
Distressed properties - including foreclosures and short sales - now make up a smaller percentage of her office's overall sales transactions than before, according to Rodriguez.
"It used to account for 40 percent of our transactions, but now it's about 25 percent," she said.
Foreclosure resales - properties foreclosed on in the prior 12 months - accounted for 16.3 percent of the Southland resale market last month. That was down from 16.6 percent the month before and 32.8 percent a year earlier, DataQuick reported.
Steve Johnson, who oversees the Riverside office of Metrostudy, a real estate information and consulting firm, said the Inland Empire's housing market is looking better.
"We're really seeing that the bottom is behind us," he said. "The drastic cuts that we've seen previously in prices aren't necessary now for banks and homeowners to sell their homes."
But inventory, he said, is a problem.
"We've had a lot of household formation going on, but we haven't been adding to the housing supply, either through listings or building," Johnson said.
Competition for homes has ramped up there as well.
"We're starting to see more competition for listings and that's resulted in multiple offers," Johnson said. "But it's going to be 10 to 12 years before we see the kind of price appreciation we saw during the housing peak."
Investors continue to account for an unusually large share of sales.
Absentee buyers - mostly investors and some second-home purchasers - bought a near-record 28 percent of the Southland homes sold last month. That was up from 27.7 percent the previous month and 25.4 percent a year earlier, according to DataQuick.
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