Posted on 04/26/2006 9:09:30 AM PDT by Smogger
Going up. For all the predictions that the elevator had reached the top, that housing prices had peaked and would only go sideways, the Inland Empire reached another milestone and posted an all-time high in March. The median price of a single-family home in the Riverside-San Bernardino metropolitan area was $403,000 in March, according to numbers released Tuesday by the California Association of Realtors.
It's the first time the median price has passed the $400,000 mark, and it comes just 21 months after prices topped $300,000 for the first time in June 2004.
"A lot of people who have been talking about the market softening were expecting prices to go down," said Jack Kyser, chief economist with the Los Angeles County Economic Development Corp. "Well, unit sales may be down, but prices are still going up, or at least moving sideways."
Sales were down 16.3 percent from March 2005 locally and were down 15.1 percent statewide in the same comparison. That leaves more homes on the market than a year ago, but the beginning of the traditional sales season shrank inventories from February.
"A lot of people are just kicking the tires right now," Kyser said. "They're trying to figure out what's going on with the market, whether it's still going up or whether they should wait to buy."
It may be that year-over-year gains of 20 to 30 percent or more are a thing of the past, but the local median was still up 15.1 percent over 12 months ago. The state median of $561,350 was 13 percent higher than March 2005.
Those numbers still leave California in a different world than the rest of the country, where analysts were excited about a 7.4 percent increase to a median price of $218,000.
David Lereah, chief economist for the National Association of Realtors, said in a release that the numbers were a hopeful sign that sales will experience only a slight dropoff this year.
"This is additional evidence that we're experiencing a soft landing," he said. "The market clearly is stabilizing."
That stability nationally is at a much lower level than the Inland Empire, let alone the higher-priced parts of California. With prices like $682,500 in Norco, $612,500 in San Dimas, $610,000 in Upland, $570,000 in Chino Hills and $567,500 in Diamond Bar, it's pretty clear that Southern California's "affordable alternative" is no longer as affordable.
"Affordable housing now means the High Desert, places like Victorville and Apple Valley," Kyser said. "In Los Angeles County, it means the High Desert around Lancaster and Palmdale."
Vince Malta, president of CAR, said March is the month in which the market "gears up for peak season activity, and this year is no exception."
Seasonally adjusted sales jumped 4.9 percent statewide in March from February, even though they were still way down from last year.
"But those were record-setting levels," Malta said. "The pace of sales seems to be picking up. Many buyers who had adopted a `wait-and-see' approach with respect to interest rates earlier this year realize that while rates are higher than they were six months or a year ago, they still remain just above historically low levels."
Plenty of homes are on the market. CAR's Unsold Inventory Index stood at 4.8 months in March, a significant drop from 6.6 in February although well above the 2.2 figure of March 2005.
"Unsold inventory climbed significantly in the first two months of this year as listings increased and sales declined," said Leslie Appleton-Young, chief economist for CAR. "Although the supply of homes for sale increased again in March, this was more than offset by a seasonal increase in sales."
Appleton-Young said she expects the supply to decline gradually over the next few months, although she doubts it will approach last year's levels.
Bill Velto, manager of Tarbell Realtors in Upland, said the picture actually was somewhat mixed, with some cities up and some down.
"If you look at the cities that took the biggest jumps, they were some of the lowest last year," he said. "If there's one thing clear in this picture, it's that there is still a demand for housing. There are lots of buyers out there and lots of sellers.
"Houses may not be selling as quickly, but that's because buyers can be choosier. There aren't that many people right now looking at it as if they have to buy this week."
- Michael Rappaport is business editor of the Daily Bulletin. He can be reached at (909) 483-9395 or at m_rappaport@dailybulletin.com.
In English, what does TBN mean?
I dont know in English. That which I wrote is Swahili.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.