Throughout the state of California, home sales dipped for the fifth-straight month in December due to a tight supply of homes on the market, but that didn’t stop home prices from edging up. After suffering a three-month decline, home prices upticked slightly in the Golden State, posting a 19.6 percent year-over-year increase in the Los Angeles area.
According to California-based real estate data analysis company Altos Research, the median single-family home value as of January 17 was $2,680,769, based on a 90-day average. Looking at 2013, the median home price didn’t see much fluctuation in terms of the 90-day average, but the seven-day average posted many more ups and downs, especially between October and December, which saw the median value peak at more than $3 million twice.
During this time, the Market Action Index (MAI), a scale that determines whether the market leans toward sellers or buyers with a neutral value of 30, spiked from a fairly moderate value of about 33 to nearly 48. The MAI has since dipped a bit to 41.92, still in favor of sellers.
Homes for sale in Santa Monica may be hard to come by right now, as there were only 47 properties on the market as of January 17. However, due to building restrictions in California, it’s expected that the market will remain fairly tight. However, more people will likely become comfortable with selling their homes as the amount of equity in the area has increased.
How California Weighs In
“While the month-to-month price gain was higher than normal, home prices have been stabilizing in the second half of 2013, which is positive news for buyers who have been putting their home search on hold until prices leveled off,” C.A.R. Vice President and Chief Economist Leslie Appleton-Young said.
“California’s housing market experienced strong price growth throughout the year, with the median price surging 27.5 percent for the year as a whole from $319,300 in 2012 to $407,180 in 2013. But again, the increase in the median price can be partly attributed to the increase in sales of higher-priced properties, where tight inventory was less of a factor,” she continued.
Speaking of available inventory, California tax incentives that were previously available to those interested in short selling their homes no longer have that opportunity, at least until Congress makes a decision to renew the breaks. If Congress decides against renewing the incentives, people who were previously considering a short sale may not want to do so anymore. This will just keep the amount of inventory in the area down and the median home value rising.
Home construction is now the key to returning back to pre-recession level so the demand for homes in Santa Monica can be met with available inventory.
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(all data current as of 10/22/2017)
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