10:31am | Home sales in Southern California rose in June from May to the highest level in a year, a report released on Tuesday shows. But the market’s still pretty much in the dumps, the report shows.
The last time sales were at this level was when the market got a boost from homebuyer tax credits, the report from real estate news service DataQuick shows.
The report credits sales of lower-cost homes to investors and first-time buyers for the increased sales. “Even high-end sales continued to outshine traditional move-up activity in middle price ranges,” DataQuick reported.
Information on individual markets, including the real estate market in Long Beach, is due to be released later this week.
More than 20,000 new and resale houses and condos were sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in June. That was up 11.6 percent from May. However, the number of sales was down 14 percent from 23,871 in June 2010, according to DataQuick.
In June last year sales were helped by government efforts to stimulate the housing market through homebuyer tax credits.
“The housing market remains dysfunctional and lopsided, just somewhat less so than it was a few months or a year ago,” said John Walsh, DataQuick’s president. “The market mix indicates that a lot of potential buyers are either stuck, for lack of equity, or spooked and are waiting things out.
Another large, lingering problem is the fussy mortgage market. Qualifying for a mortgage remains difficult for many, and the use of adjustable-rate and “jumbo” home purchase loans remains far below the historical norm.”
The median price paid for Southland residential properties purchased in June was $285,000, was up 1.8 percent from in May and the highest since $290,000 in December, 2010. The median was down 5 percent from $300,000 in June 2010.
On a year-over-year basis, the median has declined for the past four months, the report shows. June’s median was 15.4 percent higher than the low point in the current real estate cycle, which was $247,000 in April 2009. June’s median was 43.6 percent lower than the peak $505,000 median in mid 2007.
Distressed property sales accounted for more than half of the Southland resale market last month — roughly one out of three homes resold was a foreclosure, and nearly one in five was a short sale, the DataQuick report shows.
“Indicators of market distress continue to move in different directions,” the report states. “Foreclosure activity remains high by historical standards but is lower than peak levels reached over the last few years. Financing with multiple mortgages is very low, and down payment sizes are stable.”
Helen Najar, a Long Beach Realtor with Remax College Park, said another reason sales shot up could be reflective of a lagging indicator.
“In December Congress and the president agreed to extend the tax cuts that gave the economy a much needed shot of confidence,” she said. “Among other things was an uptick in buyers taking advantage of falling house prices and finding themselves able to buy in a much desired area like Long Beach. Working through the system, the sales were realized last month.”
“Unfortunately, I’m already seeing buyers pull back again because of renewed uncertainty with all the latest talk about raising taxes again,” Najar continued. “Higher taxes, slower growth, fewer jobs, less security. For every house sold, jobs are created.”