California received sunny news Tuesday as ""DataQuick's"":http://www.dataquick.com/ latest home sales report showed an increase in sales in the state's Southland region.
[IMAGE]DataQuick reported that home sales in Southern California increased year-over-year for the sixth straight month in June, attributing the increase to ""robust investor demand and significant sales gains for mid- to high-end homes.""
In addition, fewer foreclosure re-sales and greater activity in the more expensive coastal counties helped boost the region's median sale price to a two-year high.
The median price paid for a home in Southland rose to $300,000 in June, up 1.7 percent from $295,000 in May and 5.3 percent from $285,000 in June 2011. The last time the median in the region went that high was June 2010, when the market received a boost from expiring homebuyer tax credits. June's year-over-year median price increase followed similar increases in May and April, making June the third straight month to see year-over-year increases and the fifth straight month to see month-over-month jumps. Before this streak started, the median had fallen year-over-year for 13 straight months.
While June's median price was 40.6 percent lower than Southland's $505,000 peak in mid-2007, it was 21.5 percent higher than the region's low point in the current real estate cycle ($247,000 in April 2009.)
DataQuick pointed to increased demand and shrinking inventory as causes for increasing prices, but the company also noted two other trends that may have affected price.
[COLUMN_BREAK]First, there was a large drop in the share of transactions that were foreclosed properties, which usually sell at a discount and tend to be concentrated in low-cost areas. Additionally, a greater portion of sales occurred in high-cost coastal markets like San Diego, Orange, Los Angeles, and Ventura counties (which together represented 71 percent of all Southland activity).
""The June numbers look pretty good at first glance, but they're more mixed when you scratch beneath the surface. Yes, the median sale price rose again. But it's clear this has a lot to do with changes in the types of homes selling, rather than across-the-board price appreciation,"" said DataQuick president John Walsh. ""Fewer of the homes selling now are foreclosures, while more are nice houses in mid- to higher-end neighborhoods. June sales were stronger than a year earlier, but they were also around 20 percent below average for that month.""
The number of Southland homes sold for less than $200,000 in June fell 3 percent year-over-year, while the number that sold for $200,000-$400,000 increased 21.6 percent. Sales between $300,000-$800,000 increased 12.8 percent year-over-year, and sales above the $800,000 mark rose 7.1 percent. In June, 22.5 percent of all Southland sales were for half a million dollars or more.
Distressed sales made up 42.2 percent of June's resale market, the lowest level since February 2008. Foreclosure resales accounted for 24.5 percent of the resale market in Southern California, down from a revised 26.9 percent in May and 32.9 percent in June 2011. Short sales made up an estimated 17.7 percent of Southland resales, down from 18 percent in May and 17.9 percent last year.
Though the increase in sales and prices may be a sign of recovery, Walsh warned that the market could still go either way.
""Super-low mortgage rates and lower home prices have attracted many buyers and helped compensate for the economy's lackluster performance, and for not-so-great consumer confidence,"" he said. ""With inventory and foreclosure resales dwindling, more housing markets appear to be entering an early recovery phase. But in some cases we consider their status to be fairly precarious. What happens next will hinge largely on the strength of the economy and the decisions lenders make regarding scores of distressed properties that continue to hang over the market.""