Annette Haddad
The rate of home appreciation in Los Angeles County continued to cool in August, posting its smallest gain in more than a year, according to data released Tuesday.
The county's median price — the point at which half of all houses and condos sold for more, half for less — was $407,000 in August, according to DataQuick Information Systems, a La Jolla firm that compiles the monthly results.
That was up 20.4% from a year earlier, but only 0.2% above July's $406,000 and 1.6% below June's record $414,000. The slight change in prices over the last three months means that the spectacular run-up over the last two years has begun to stabilize. August's year-over-year rise was the smallest since June 2003.
The latest numbers, said John Karevoll, DataQuick's chief analyst, point to a soft landing for Southern California's high-revving housing market. "I know a lot of people seem to think that the market is — quote — turning," Karevoll said. "But to me it looks like normal activity at this point."
Despite steady inventory growth since June, sales volume remained strong, with 10,710 new and resale houses and condominiums changing hands in August, according to DataQuick. It was the sixth straight month that sales topped the historically high 10,000 mark.
That was surprising to Raphael Bostic, a professor with USC's Lusk Center for Real Estatecolor>, who thought that double-digit year-over-year price increases and the Federal Reserve's gradual increase in short-term interest rates would mean fewer people would be able to afford homes. "That hasn't happened," Bostic said.
As of Tuesday, the rate on a 30-year fixed-rate mortgage stood at 5.83%, up from 5.77% the week before — about the same as a year ago.
But like prices, the sales rate also is on the wane. August's total was 9.8% below the same month a year earlier and 7.3% below July's 11,549.
Culver City real estate agent Dora Rivas knows first-hand that there are plenty of buyers still willing to pay top dollar for a home.
On Sunday, Rivas presided over an open house on Jasmine Way. Within four hours, 100 people had passed through the doors of the two-bedroom, one-bath home priced at $625,000. By Tuesday, she had half a dozen offers on the property at 5% to 10% above the list price.
"If a house is priced well, it will sell," said Rivas, who has been selling homes for 15 years. "I knew that this house would find its market level."
At the same time, Rivas said some of her listings are sitting 20 to 30 days before receiving any offers, suggesting that buyers are being choosy because they know there are more homes on the market. Of her five listings that closed escrow in August, two sold at or above the asking price, two sold below and one sold at the list price.
"It's still fairly active, but buyers have become more selective," she said.
In August, the median price of a single-family Los Angeles County house being resold rose 20.7% from August 2003 to $425,000, the resale condo median jumped 24.1% to $330,000 and the median new-home price climbed 10.7% to $453,750. All categories were essentially unchanged from July's figures.
Christopher Cagan, director of research for title insurer First American Corp. in Santa Ana, said that after the first half of the year, when prices appreciated at a rate of 27%, the housing market now is "taking a breather."
He said the "headstrong, buy anything" mentality of Southern California home buyers earlier this year is unlikely to repeat itself.
"That type of thing doesn't go on forever," Cagan said.
August housing data for Orange, Riverside, San Bernardino, Ventura and San Diego counties are expected to be released later this week.