It’s been a delightful summer at the beach; the ocean breezes make life much so much easier. Those in search of the good life come here, and that’s why the Santa Monica and Venice real estate markets have been gaining momentum all year. If you contrast August 2012 with August 2011, you’ll notice that the median sold price for properties has risen 5% since last year – from an average of $1,195,000 to $1,260,000.
They say good ideas start on the coast and move inland. The June S&P/Case-Shiller report on housing prices checks in with positive across the country. All markets in its 20-city composite are showing gains for the second month in a row. The sample represented by the chart covers about 21% of all of the zip codes in the nation, and is based (like Case-Shiller) on a repeat-sales methodology. The striking aspect is that there haven't been price increases in the majority of the sample's zip codes since before 2007.
Bravo! The experts say the across the board price gains offer more evidence that the U.S. housing market has passed the bottom and is now in a period of sustainable recovery.
We’re seeing it here in California. Statewide, sales of existing single-family homes increased by 15.3% in July to 529,230 units (seasonally adjusted, annualized rate). The median price continued its upward climb, rising by an impressive 12.7% to $333,860. Btw, this was the highest median price recorded for an existing single-family detached home in California since August 2008 < and was the fourth consecutive month where the median price was above $300,000. In Los Angeles County unit sales rose by 9.1% over the year to July and the median price increased by 5.4% to $334,190.
The inventory of unsold single-family detached homes in California was 3.4 months last month, down from 5.6 months in July 2011. Los Angeles County found itself with a 3.4 month supply of single-family homes in July (compared with 5.8 months a year ago). Inventories are exceptionally tight.
Truly a seller’s market in higher-end coastal communities where inventories are driving sales and price increases.
“There’s virtually no supply in a lot of markets right now,” observes Michael Krein, president of the National REO Brokers Association. “What we’re finding nationally is that 50% of all purchasers are investors because they can outbid the owner occupant buyers. Investors are bidding up anywhere from 5 to 25% over the list prices.”
Investment in rentals, which is coming from small groups rather than Wall Street funds, is filling vacant homes and improving rundown properties. This area is also renewing the demand for construction jobs, notes Tom Shapiro, chairman of GTIS Partners, an investment fund that plans to spend $1 billion on rental housing in the next five years.
“The housing market is turning around,” Shapiro offers. “Maybe the silver bullet for housing is the single-family-for- rent, because it’s underpinning the market. It’s sopping up the excess.”
Investors are taking advantage of home prices that are about 31% below the 2006 peak and growing demand for rentals from people with damaged credit, limited savings or lack of confidence in owning a house.
We’re here to help you with your property needs. Please contact Jodi Summers and the SoCal Investment Real Estate Group @ Sotheby’s International Realty – email@example.com or 310.392.1211, and let us move forward together.