More home price records set in all six counties, despite rate hike – Press Enterprise

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The sharp rise in mortgage rates is starting to cool the region’s housing market, but not enough to sustain prices hit all-time highs in all six counties last month.

The median price of a Southern California home — or the price in the middle of all sales — was $735,000 in March, DQNews reported Wednesday, April 20, using data from real estate research firm CoreLogic. based in Irvine.

The region’s median has set records in 12 of the past 14 months, rising $105,000, or nearly 17%, since March 2021. That’s an average price increase of $2,019 per week.

Prices rose by double digits in all six counties. In Orange County, the median home price jumped 22% to $1.02 million for all homes, with single-family homes rising 28% to $1.2 million. Steve Thomas of ReportsOnHousing.com reported that six out of 10 homes in the Orange County market are listed for $1 million or more.

Sales, meanwhile, fell 8.5% from a year ago, but the region still had the second-highest tally for a March month in the past 16 years. A total of 23,225 homes, condos and townhouses changed hands in March, according to figures from DQ News/CoreLogic.

Rising mortgage rates make the cost of buying a home more expensive. But that was offset by fierce competition for the lowest number of homes for sale in nearly two decades.

Moreover, the rise in rates had the counter-intuitive effect of pushing even more people to buy before rates rose even higher.

“What (the rate hike) has done is motivate every buyer to avoid getting shut out of the market,” said Corey Nelson, a broker at Sotheby’s International Realty’s Sunset Strip office in West Hollywood. “It creates an additional rush. … But it’s something temporary. This will drive the market down. »

The March figures reflect deals signed in late January through February, when 30-year fixed mortgage rates averaged 3.7%. They do not reflect the impact of last week’s spike to 5%, an 11-year high.

“The house prices you see today are an artifact of what happened 30 to 90 days ago,” said Ralph McLaughlin, chief economist for Kukun, a real estate technology website for homeowners. and investors. “Five percent (rate) will likely slow the rate at which homes sell. This will not reduce sales significantly, but the price gains will be more moderate. »

McLaughlin said Southern California’s appreciation rate is at an all-time high that will decline to 10%-15% by June.

But it won’t kill the market or drive down house prices, say McLaughlin and other housing economists.

Freddie Mac chief economist Sam Khater released a quarterly forecast on Monday, April 17, predicting the housing market “will remain strong” even as mortgage rates rise. Higher rates will limit the number of existing homeowners refinancing their loans. But housing demand remains high, he said.

Khater predicted that the average gain in U.S. home prices would be 10.4% this year and 5% in 2023.

Fannie Mae’s April outlook predicts U.S. home sales will fall 7.4% this year and 9.7% in 2023. As for prices, the government-sponsored lender predicted continued gains, but at a slower pace, rising from 20% earlier this year to 3.2% by the end of 2023.

Spring is typically the busiest season of the year, with 45% of Southern California transactions taking place from March through July. But this season will be a bit cooler than previous years, housing analyst Thomas said in his latest market report.

“Multiple offers are still the norm, and most homes fly off the market and go into receivership moments after sale signs are pounded in the front yard,” Thomas wrote. “Buyers are still frustrated with the lack of available homes to buy in all price ranges. Salespeople remain in the driver’s seat able to make the decisions. Nevertheless, trends have emerged that highlight a cooling market.

The typical 30-year mortgage payment for a Southern California median-priced home rose to $3,157 last month. Thanks to the double whammy of rising prices and rising rates, that’s up $1,000, or 47%, from a year ago.

Using words like “buyer fatigue” and “sticker shock,” agents say buyers are becoming more cautious and are less likely to waive covenants like loan and inspection contingencies. More and more homeowners are forgoing bids after getting caught up in the bidding frenzy, then recalculating the monthly payment amount.

“Some buyers are seeing their prices go down because of rising rates,” said Myiesha Majors, sales agent at Berkshire Hathaway in Rancho Cucamonga. “But not as much as some might think. … At this time last year, I would easily see 30 (offers). Now it’s five or six. So it’s greatly reduced but still multiple.

Homes priced below the median receive the most attention. In Glendale, where homes typically sell for more than $1 million, a 1,200-square-foot two-bedroom home listed for $998,000 received 46 offers and sold for $1.43 million, a said Darin Eppich of brokerage Sotheby’s Sunset Strip.

Enrollment remains at its lowest level in about 18 years. Zillow figures show the number of homes for sale in the six-county area rose by 2,000 units last month to 28,665 homes for sale. But enrollment is still down 26.5% from March 2021 and 43% from two summers ago.

“Yeah, inventory is up if you squint really, really hard on the chart,” McLaughlin said. “We see stocks moving in the right direction, but there is still a long way to go before this is normal.”

Here’s a county breakdown of median home prices and sales, with year-over-year percentage changes:

— The Los Angeles County median rose 12.0% to $840,000; sales fell 5.5% to 7,531 transactions.– Orange County median rose 22.2% to $1.02 million; sales fell 18.6% to 3,184 transactions. – Riverside County median rose 21.6% to $580,000; sales fell 7.8% to 4,646 transactions.– San Bernardino County median rose 15.1% to $495,000; sales fell 4.9% to 3,111 transactions.– San Diego County median rose 18.7% to $805,000; sales fell 9.3% to 3,736 transactions.– Ventura County median rose 17.5% to $775,000; sales are down 5.8% to 1,017 transactions.

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