U.S. home prices are slightly above the peak set in July 2006, according to the Case-Shiller national home price index.
November 29, 2016
Southern California home prices jumped last month, but sales flatlined in a region where homeownership is increasingly out of reach for the middle class.
The six-county region’s median price rose 6.9% from a year earlier to $465,000 in October, real estate firm CoreLogic said Tuesday. Sales inched up 0.3%.
Prices in Southern California and across the nation have risen steadily in recent years – a result of an improving economy, rock-bottom mortgage rates and a shortage of homes for sale.
Nationwide, prices have now surpassed their bubble peak in 2006, not adjusted for inflation, according to the closely followed Case-Shiller index, also released Tuesday.
That gauge lags behind other home price indicators but is widely considered the most reliable read on home values. In the Los Angeles metro region, which includes Orange County, prices in September jumped 5.9% and are now 7.8% below their bubble peak, Case-Shiller data show.
The price surge has locked many first time buyers out of the market. But it has been a boon to owners, many of whom regained equity after being underwater on their mortgages following the Great Recession crash.
The gains have been seen across Southern California, though inland areas remain further behind. In October, the median price — the point where half of homes sold for more and half for less — rose in all six counties compared to a year earlier, CoreLogic said.
In Los Angeles County, the median jumped 7.4% to $525,000; in Orange, 9% to $655,000; in Ventura, 7% to $535,000; in San Bernardino, 9.6% to $285,000; in Riverside, 8.1% to $335,000; and in San Diego,11.1% to $507,500.
The sustained price gains have real estate agents, buyers and sellers wondering how long the hot market can continue.
Most economists say price increases should be smaller next year as families struggle to make larger offers on homes. Wage growth simply isn’t keeping up with the rising cost of housing, they say.
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