Southern California's housing boom continues with record prices

Southern California's busiest season for home buying took off with a bang last month, as fierce competition among buyers drove prices up to record highs and sales soared to one of the highest levels in years.

Seven months into a new market boom, bidding wars remain common and home shoppers are buying without the normal exit strategies based on how their financing, appraisals or home inspections turn out.

"It's a tough market for buyers. ... They're getting appraisals waived and no contingencies," said Kathy Clark, an agent with Pacific Realty in Covina. "I've had a couple (buyers who) waived everything. They waived termite (repairs), inspections and came in over asking."

The median price of a Southern California home was $630,000 in March, according to figures released Wednesday, April 21, by DQ News/CoreLogic. That's up 14.5% from last year to the highest median in records dating back to 1988.

It was the region's second record price in a row and the seventh in the past 13 months.

Los Angeles, Orange, Riverside, San Bernardino and San Diego counties also posted record-high prices in March. In L.A. County, prices jumped $110,000, or 17.2%, from March 2020 to last month's median of $750,000.

The average home in the region sold about 2% over the asking price, according to Redfin. The California Association of Realtors reported almost two-thirds of all transactions in the state sold over the asking price.

Even at those prices, 24,885 Southern California homes changed hands last month, up 32.2% from March 2020 to the second-highest level in almost three years and the most for a March in 15 years. The only month this year with more sales was December, when 25,103 homes changed hands.

Last month's 32.2% sales jump was the 11th biggest monthly gain in the 34 years CoreLogic has been tracking local housing numbers.

Low mortgage rates, a lack of for-sale supply and a recovering economy continued to drive up prices in the region.

Rates on a 30-year, fixed-rate mortgage averaged 2.88% in the three months ending in March vs. 3.51% a year earlier. That translates into 8% more buying power, meaning mortgage payments are held in check even as prices rise. Someone putting 20% down would pay just $113 more per month for the median-priced home today than they would have a year ago despite an $80,000 price gain.

"You're not going to get a better deal on your financing than you are right now," said Scott Wild, a vice president at Irvine-based John Burns Real Estate Consulting.

At the same time, the number of homes for sale remains at the lowest level in years. The region had 36,241 homes listed for sale as of February, compared with 49,000 a year earlier, according to Zillow.

The ratio of listings to sales is at its second lowest level since April 2004, state Realtor figures show.

"A lack of homes for sale is creating unprecedented market competition, leading to a record share of homes selling above asking price in March," CAR President Dave Walsh said in a statement last week.

Prices for existing single-family homes and existing condos also hit record highs.

The median price of a resale house was $683,000 last month, up almost 19%, the DQ News/CoreLogic figures show. The median resale condo price was $530,000, up 11%.

L.A. County had the region's priciest condos at $601,000, the first month condos there broke the $600,000 price barrier.

March marked the seventh straight month the region had double-digit gains for both prices and sales. Some ZIP codes in the region had triple-digit sales gains. The Orange County city of Stanton had 71 home sales in March, vs. 17 in March 2020, DQ News/CoreLogic figures show. That's a 318% increase. The median price of a Stanton home rose 30.1% to $596,500.

Sales were up 137% in Newhall and 110% in Calabasas. Resort areas also were hot: Lake Arrowhead's 92352 ZIP code had a 117% sales jump, with prices climbing nearly 52%. Big Bear had a 61% sales gain and a 44% price gain.