Prices bouncing back for California housing market
By JULIE WATSON Associated Press July 18, 2013 3:24PM
SAN DIEGO (AP) — Home prices across California are bouncing back but there’s still little on the market to buy.
The median price for homes in the nine-county San Francisco Bay area reached $550,000 in June — the highest since December 2007. In Southern California, the median price surged to a five-year high, hitting $385,000, according to the latest figures from the real estate tracking firm DataQuick released Thursday.
DataQuick attributed the rise to disappearing distress sales, an improving economy and still low mortgage rates.
But many strapped homeowners — and investors — are holding off on jumping into the market, keeping inventory stubbornly low: The real estate information service said last month’s sales in the San Francisco Bay Area were 20.9 percent below the June average of 9,993 sales.
In Southern California, sales were down 6.2 percent from May and 2.1 percent from June 2012. That year-over-year decline was the first for any month since September.
The drop is atypical for the California market, when housing sales tend to increase between those two months.
“We’re still bouncing off the bottom. This next part of the cycle should be fairly self-adjusting,” said John Walsh, DataQuick president. “As prices go up, more homes will come on the market. Price pressures will ease. The only element we don’t know much about right now is how much pent-up demand there really is out there.”
Bay Area home buyers are putting near record amounts of their own money into residential real estate, according to DataQuick. In June they paid a total of $2.3 billion out of their own pockets for down payments or cash purchases. That was down from May’s all-time high of $2.6 billion, and up from $2.2 billion a year ago.
San Diego relator Steve Seus said buyers, especially in urban neighborhoods with their concentration of limited older homes, have been getting into bidding wars.
He recently sold a home in a central San Diego neighborhood in two days for $35,000 above asking price.
“The combination of low interest rates and still historically low prices certainly has attracted a lot of people,” he said. “Literally, I had 175 people go through one home.”
Real estate experts expect the escalation in prices to slow in coming months, especially if mortgage interest rates go up.
Abby Boull’t, 32, a mother of two, prays that happens, but she is also feeling the pressure to buy now or lose out.
Boull’t and her family hoped to be able to buy their first home, but their lender told them they must wait for six months since her husband changed companies and needs more work history to qualify for a loan.
“If prices keep going up we might have to keep renting until we can save more,” she said. “We’re hoping this is just another bubble.”