Southern California’s housing market lost steam in May, with sales falling from the month before and a year earlier as investor buying dropped amid rising prices and tight inventory, a market tracker said Wednesday.
Prices continued to rise, but the gains were half as large as a year earlier.
Last month 19,556 new and previously owned houses and condos sold in the six county region, down 2 percent from April and down 15 percent from a year earlier, La Jolla-based DataQuick reported.
Sales across Ventura, Los Angeles, Riverside, San Bernardino, Orange and San Diego counties have now fallen on a year-over-year basis for eight consecutive months. Last month’s turnover of homes was 23 percent below the May average of 25,393 sales, the company said.
“We expected rising prices to unlock more inventory this spring, and that’s happened. But the supply of homes for sale still falls short of demand in many markets, contributing to a rise in prices and a below-average sales pace, said DataQuick analyst Andrew LePage.
Michael Carney, executive director of the Real Estate Research Council at California State Polytechnic University, Pomona, said that the market is not acting in typical fashion.
“I really don’t understand it. Why is there not more inventory?” Carney mused. “One possibility is that they (owners) are waiting because they see home prices going up.”
That is likely to change, soon.
Last month, the region’s median price rose 11 percent to $410,000 from $368,000 in May 2013.
But a year ago annual price gains of 20 percent or more were occurring on a regular basis. Now prices are rising at a “substantially” slower pace than a year ago, DataQuick said.
In Los Angeles County, the median price rose 10 percent to $450,000 from $410,000 a year earlier.
“Four or five years ago, if we were having a conversation about when we would get back to this price level I would have said later in this decade, sometime after 2015 and not before. The (price recovery) we’ve seen so far has been fairly pronounced, Kleinhenz said.
San Bernardino County is still seeing healthy appreciation. It’s median price rose 21 percent, the region’s biggest gain, to $295,000. And it had the region’s smallest sales decline — 10 percent to 2,382 properties.
The influence of distressed properties, which helped drive the market as it climbed out of the Great Recession, continued to fade in May.
Homes foreclosed on in the prior 12 months accounted for 5 percent of the Southland resale market in May, down from a 6 percent in April and from 11 percent a year earlier. Foreclosure resales are at their lowest level since early 2007, DataQuick said.
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