If you have paid off your home mortgage or are looking to buy a new home, there’s good and bad news in your life.
Southern California home prices muscled to an all-time high in April as the hot real estate market got even hotter. That’s the top paragraph in a Los Angeles Times story about the state’s six-county region’s median home prices.
According to data released Tuesday, the Southland region’s median home price increased 20.2% year over year to a record $655,000. The data was released by real estate firm DQ News. That’s $25,000 more than the previous median price record set in March.
April home sales leaped in the first year-over-year increase of more than 20% since December 2013, Becky Beavers of DQ News said.
The uptick is a reflection of the pandemic-fueled housing boom and of a market that was cooled by the Coronavirus last spring as sales died in escrow and would-be sellers decided not to move.
It’s the ninth consecutive month of double-digit price increases and experts credit a mix of factors including ultra-low interest rates, increasing demand for space and an emerging home-buying demographic: Millennials.
Another contributor is the housing shortage. There’s a glut of potential buyers but a shortage of sellers and it’s leading to bidding wars that drive offers far above the original price tag.
In March, more than half of the homes in Los Angeles fetched more than the seller was asking, according to the Multiple Listing Service.
“It’s ironic,” Compass agent Bret Parsons said. “The person who determines the price of a home in this market is the buyer, not the seller. If you price a home accordingly, it will receive multiple offers automatically.”
In Los Angeles County, the median price rose 19% to $750,000 in April, while sales climbed 101%.
“I’ve never seen so many qualified buyers struggle to buy a property,” RE/Max One Agent Jordan Cohen said, adding that this is the most competitive market he has seen in 31 years of residential real estate.
He’s not surprised at the market surge in April because the March-May stretch is historically one of the busiest times for home buyers, as families look to move to into new school districts before the summer.
This year, he has been regularly submitting offers over the asking price for his clients, some cash, and still losing out on homes.