LA Home Prices Surge Past New Record

LOS ANGELES, CA — The median price of a single-family home in Los Angeles County was up 9.1 percent last month, compared to May 2017, reflecting a statewide gain that pushed California home prices to a record level, according to figures released Tuesday by the California Association of Realtors.

In Los Angeles County, the median price of a single-family home was $536,940 in May, up from $492,040 during the same month a year ago, according to CAR. The median price was up 1.6 percent from $528,540 in April.

In Orange County, the median price saw a 5.4 percent year-over-year jump, going from $795,000 in May 2017 to $838,000 last month.

The increases helped fuel a 9.2 percent jump in median home prices statewide, according to CAR. The statewide median was $600,860 in May, up from $550,230 in May 2017 and up 2.8 percent from $584,460 in April. The statewide median price broke the previous record of $594,530, which was set more than a decade ago during the housing boom.

"As we predicted last month, California's statewide median home price broke the previous pre-recession peak set in May 2007 and hit another high as tight supply conditions continued to pour fuel on the price appreciation fire," said CAR Senior Vice President and Chief Economist Leslie Appleton- Young. "With inventory starting to show signs of improvement, however, home price appreciation could decelerate in the second half of the year, especially since further rate increases are expected to hamper homebuyers' affordability and limit how much they are willing to pay for their new home."

While prices were on the rise, home sales showed a year-over-year decline, CAR reported.

Home sales dipped 5.5 percent in Los Angeles County in May, compared to the same month last year, even though sales increased by 17.6 percent between April and May. In Orange County, sales were down 7.4 percent from May 2017.

Sales statewide dropped 4.6 percent from May 2017, and they were down 1.8 percent from April.

"The softening in May home sales was due in part to the spike in interest rates in mid-April, when the 30-year fixed mortgage rate jumped 20 basis points in just one week to reach the highest level since 2014," CAR President Steve White said. "Homebuyers may have postponed escrow closings to wait out the effects of the rate surge. Additionally, the specter of rate increases earlier in the year may have pulled sales forward into the first quarter, which resulted in the subpar performance in the last couple of months."

City News Service; Photo: shutterstock