Southern California median home price breaks record set last decade during housing bubble
Source: The Los Angeles Times
The Southern California median home price in December finally surpassed bubble-era highs, a milestone that took more than a decade to achieve and is once again raising concerns that housing is too costly. The six-county region’s median price surged 8.2 percent from a year earlier to $507,500, real estate data firm CoreLogic said Wednesday. That tops the bubble-era high of $505,000 in 2007, which was matched in September and November.
Making sense of the story:
* Adjusted for inflation, the region’s median is still nearly 13 percent below the 2007 peak, and there are other caveats as well. But the new nominal record is noteworthy as a historical marker and because more borrowers who were underwater probably are no longer.
* The Southern California median was driven higher by a greater number of new home sales, which rose 6.2 percent even as total sales dropped. The median price for a resale house at $520,000 remains $30,000 below its nominal 2007 peak.
* Many economists think today’s upswing is more sustainable, driven not by risky lending but by an improving economy, historically low mortgage rates and a shortage of homes for sale. If a borrower can scrape together a down payment and qualify for a loan, mortgage payments are still cheaper than during the go-go-days of the mid-2000s. That’s in part because the average interest rate for a 30-year fixed mortgage has been hovering in the high 3 percent-range.
* The median increased in December, compared with a year earlier, in all six counties tracked by CoreLogic. Prices rose 9.6 percent to $570,000 in Los Angeles County; 4.6 percent to $698,000 in Orange County; 5.8 percent to $365,000 in Riverside County; 8.0 percent to $323,000 in San Bernardino County; 7.7 percent to $559,000 in Ventura County; and 9.1 percent to $540,000 in San Diego County.
Read the full story: http://www.latimes.com/business/la-fi-home-prices-20180124-story.html