Los Angeles County’s skyrocketing home prices erased any savings low mortgage rates created, resulting in a rare, mid-spring sales drop.
House hunters pulled back as affordability waned and homes that were on the market sold swiftly. Traditionally strong May saw transaction counts drop from April across Southern California.
Here’s what my trusty spreadsheet found within DQNews/CoreLogic’s report on closed transactions in May from Los Angeles County …
Sales: 7,800 existing and new residences sold — down 7% from April. May has average 6.1% gains since 1988 in a one-month period where transactions rose in 27 of the last 34 years.
To be fair, last month was a 15-year high for a May; up 117% from pandemic-iced May 2020; and 14% above the 10-year average buying pace.
Past 12 months? 83,833 Los Angeles County sales — up 21% above the previous 12 months and 9% above the 10-year average but 10-year average and 13% off the pace since 1988.
Prices: The countywide $775,000 median was up $155,000 or 25% — over 12 months. Over 10 years, gains averaged 9.2% annually. The latest 12-month gain ranks No. 13 of 389 periods since 1988. The latest median breaks the record of $750,000 set in March and April.
Past 12 months? Seven records set. The median’s $155,000 increase equals $17.69 for each hour over 12 months.
Here’s a look into key slices of Los Angeles County’s market in May …
Existing single-family houses: 5,260 sold, up 102% in a year. Median of $850,000 — a 31% increase over 12 months.
Existing condos: 2,142 sales, up 169% over 12 months. Median of $625,000 — a 21% increase in a year.
Newly built: Builders sold 398 new homes, up 106% in a year. Median of $727,000 — a 11% increase over 12 months.
Builder share: 5.1% of sales vs. 5.4% a year earlier. Los Angeles County builders’ slice of the market ranks No. 5 among SoCal’s six counties.
How cheap is money? Rates on a 30-year, fixed-rate mortgage averaged 3.03% in the three months ending in May vs. 3.33% a year earlier. That translates to 4% more buying power for house hunters.
At these rates, a buyer with 20% down would pay $2,625 a month on the $775,000 median sale vs. $2,180 on last year’s $620,000 median. So during the past year, the typical house payment became 20.4% pricier.
How swift is the purchasing pace? Homes sold averaged just eight days on the market in the Inland Empire; 10 days in Los Angeles and Orange counties, Zillow reported.
So is this market risk free? By one calculation, the Inland Empire is the nation’s fourth-riskiest market. Los Angeles-Orange County was No. 32 of 47 metros studied.
Around Southern California, according to DQNews’ latest report on closed sales in May …
Six-county region: 23,956 sold, up 95% over 12 months. Median price was record $667,000 — a 25% increase.
Orange County: 3,491 sold, up 113% in year. Median? record $895,000 — a 19% increase.
Riverside County: 4,358 sales, up 82% in year. Median? record $502,250 — a 23% increase.
San Bernardino County: 2,960 sold, up 61% in year. Median? $432,000 — a 17% increase.
San Diego County: 4,222 sales, up 82% in year. Median? record $725,000 — a 23% increase.
Ventura County: 1,125 sold, up 129% in year. Median? $701,500 — a 21% increase.
Jonathan Lansner is business columnist for the Southern California News Group. He can be reached at jlansner@scng.com