By Kevin Felt Staff Writer
The Los Angeles County real estate market appears to be losing steam, but the region's median home price still hit a record high during the second quarter of 2004.
The median price for an existing, single-family detached home in L.A. County was $438,430 for the quarter, a 30.4- percent increase over the same period last year, according to the California Association of Realtors.
However, the number of home sales decreased 6.9 percent compared with the second quarter of 2003.
California's median price increased 25.3 percent year-over- year to $461,730, and sales grew by 10.4 percent.
"The key reason home prices are going up is that there continues to be a real shortfall of inventory relative to the demand for homes,' said Robert Kleinhenz, CAR's deputy chief economist.
Though he expects future price hikes to be more modest, he still anticipates gains "for the foreseeable future.'
"The implication for first-time buyers is if they have any ability to buy a home and it is a sound financial decision for them, they should attempt to do so as soon as possible because it only gets more difficult with each passing month,' said Kleinhenz. "This is the primary wealth-building vehicle that most households use to accumulate wealth over time.'
John Rizzi, a real estate agent at Dilbeck Realtors GMAC Real Estate in Arcadia, also said big year-to-year price jumps likely will soon slow down.
"I think that price jumps might flatten out a little bit, but I don't think they're going to drop tremendously,' he said. "I just can't imagine them continuing above the 25 percent clip like they have been for the last three or four years.'
Rizzi expressed sympathy for house hunters.
"I feel bad for first-time buyers trying to scrape together money to buy a first home,' said Rizzi. "It's a challenge because more and more people are coming to California and there isn't enough housing.'
Homes that would have sold in a few days in the winter are now often on the market for two or three weeks, he said.
For similar reasons, Raphael Bostic, director of the Casden Real Estate Economics Forecast at USC's Lusk Center for Real Estate also expects to see the rate of appreciation start to slow down soon.
"I would have expected to see it relatively quickly given recent increases rise in interest rates [by the Federal Reserve], but mortgage rates are still relatively low,' he said. "It may be that the market is waiting to see how the election turns out.'
Locally, Alhambra posted the largest year-to-year percentage price increase. The $385,000 median home price in the second quarter of 2004 was up 39.2 percent from 2003, according to separate second-quarter figures from La-Jolla-based DataQuick Information Systems. The smallest year-to-year increase was the 16.2 percent gain in La Canada Flintridge, where the median price rose to $899,500.