Southern California home prices jump in June
Southern California home prices jumped in June as prospective buyers bid higher, fighting over a meager supply of homes for sale.
The six-county region’s median price rose 5% from a year earlier to hit $464,000 in June, data firm CoreLogic announced Tuesday. Sales were essentially flat, reflective of the low inventory that experts say is driving up prices.
Job growth and historically low mortgage rates are also adding fuel to the fire, and prices have now risen for more than four years. In some communities, prices are now higher than during the bubble, at least before accounting for inflation.
According to CoreLogic’s calculations, the median price in Orange County surpassed its bubble-era high of $645,000 in May. The county’s median continued to climb in June, reaching $657,500.
Other areas have further to go.
Los Angeles County’s median price, for example, rose 6.2% from a year earlier to $530,000 in June. That is 3.6% below the county’s peak of $550,000 in summer 2007.
San Bernardino County is 25% below its peak, Riverside County 23%, Ventura County 12.7% and San Diego County 4.3%.
In other housing news Tuesday, the Commerce Department said builders nationwide started construction on 4.8% more new homes in June than a month earlier.
Economists say one reason prices have soared in many areas of the country is not enough homes have been built to meet demand.
Though prices in some communities are nearing, or surpassing, levels seen during last decade’s bubble, CoreLogic analyst Andrew LePage cautioned that there are important differences this time, including that lending standards are far tighter.
“The last cycle benefited from loose underwriting and high-risk ‘subprime’ home loans that allowed borrowers to stretch to their financial max, if not well beyond,†he said.
And today, after accounting for inflation, even Orange County prices are about 10% below their 2007 peak, he said.
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