DataQuick: Southern California Sales Prices Continue to Heat Up in July

Despite a dip from June, July marked the seventh straight month for year-over-year increases in home sales in Southern California, ""DataQuick"":http://www.dataquick.com/ reported Tuesday.

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A total of 20,588 new and resale houses and condos sold in the region during the month, down 6.7 percent from June up 13.8 percent from July 2011. The month's sales were 19.4 percent lower than the average July total since 1988, when DataQuick's statistics begin.

A jump in higher-priced sales made up for a slight drop in the lower price range. The number of homes in the area that sold for less than $200,000 fell 5.8 percent year-over-year, while the number that sold for $200,000 to $400,000 rose 13.4 percent. Sales between $300,000 and $800,000-a range that includes many move-up buyers-increased 22.0 percent, and sales above $800,000 increased 7.2 percent.

The lack of low-price sales stemmed from a decrease in distressed sales, which made up only 39.7 percent of July's resale market. That was the lowest level since 36.0 percent in January 2008.

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Lack of activity in the distressed market caused the median home price in Southland to rise up to $306,000, a 2.0 percent increase from June and 8.1 percent increase year-over-year. It is also the highest median price since September 2008, when it was $308,500.

July marks the sixth straight month in which the median rose month-to-month and the fourth month in which it increased year-over-year.

In addition to a sharp drop in deeply-discounted foreclosure resales, DataQuick attributed the gains in median price to an increase in demand, triggered mostly by historically low mortgage rates and a shrinking inventory. As such, the rapid pace of year-over-year price appreciation may be short-lived.

""Even adjusting for changes in market mix, there's growing evidence prices have crept up in areas where more demand has met a shrinking number of homes for sale,"" said DataQuick president John Walsh. ""But we're approaching the peak of the traditional spring-summer home-buying season. Whether these trends hold into the fall and winter isn't clear. If they do, then logically the number of homes on the market would eventually rise to meet the demand.""

""More owners will be interested in selling, knowing their homes are likely to fetch a higher price, and more people will shift from a negative to at least a slightly positive equity position, enabling them to sell. Home builders could rev up operations, and lenders could push more distressed properties onto the market sooner. It would tame any price appreciation.""