“Bubble watch”Drills into trends that may indicate future economic and / or housing market troubles.
Buzz: Home prices, supported by a pandemic in Southern California, are skyrocketing at a pace not seen since the early days of real estate recovery from the Great Recession.
Source: Reliable spreadsheet analysis of DQNews / CoreLogic home purchase data, history up to April and 1988.
trend
Median selling prices in the Southern California region of the six counties were $ 655,000 in April, rising $ 60,000 in just three months.
This means that typical homes here will increase at a rate of $ 1 every two minutes from February to April.
Yes, it’s a great buying season, so prices jump — averaging 5% over the three months from 1988 to April. This year it doubled to a 10% increase!
How unusual is it? Only 10 times in 34 years, there was a bigger price hike.
And what was the last time you saw a faster rise?
Now, at the beginning of the August pandemic era, there was an 11% spurt, so COVID-19 produced the two biggest spikes in 34 years. However, there was a final big increase in June 2013, before the coronavirus became a common name.
Anatomy
Consider the price increase for the three months to April at the county level. They are ranked according to the scale of the price surge.
San Diego: It recorded a median of $ 700,000 and increased by $ 60,000 in three months. This 9.4% increase has been more than 11 times since 1988.
Orange: The median was $ 872,750, an increase of $ 73,750 over the three months. The 9.2% gain has exceeded 10 times since ’88.
Los Angeles: It was a record high of $ 750,000 and increased by $ 60,000 in three months. Since 888, the rate of increase of 8.7% has exceeded 20 times.
Ventura: It hit a median of $ 705,000 and increased by $ 55,000 in three months. This 8.5% gain has exceeded 36 times since 1988.
San Bernardino: The median was $ 436,500, an increase of $ 34,000 over three months. This 8.4% increase has exceeded 23 times since 1988.
Riverside: The median was $ 489,750, an increase of $ 33,000 over three months. This 7.2% gain has exceeded 25 times since 1988.
How do you foam?
On a scale from zero bubbles (no bubbles here) to 5 bubbles (5 alarms) … 5 bubbles!
When 2021 began, Southern California homes weren’t affordable.
How many people have achieved a 10% salary increase since January? That made affordability even worse in the first quarter of this year.
Remember that the down payment required has also increased by 10%.
In addition, mortgage rates gradually rose from their all-time lows in January, declining house hunters’ purchasing power by about 4%.
Jonathan Lansner is a business columnist at the Southern California News Group.He can reach at jlansner@scng.com
Southern California home prices jump $1 every 2 minutes – Orange County Register Source link Southern California home prices jump $1 every 2 minutes – Orange County Register
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