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Constance Dunn
Wendy Bowman2017 Home Prices / Sales off to Fast Start
Southern California home prices and sales rose in January from a year earlier—sales in the six-county region rose 5.4% to reach the highest level for a January in four years, as reported by CoreLogic. The median price for Southland new and resale homes increased 5.3% from January 2016 and reached $455,000. January price gains add to a four-year-plus rising market, a result of a strong job market, low mortgage rates, and a continued shortage of homes for sale.
Additionally, the National Association of Realtors has unveiled a new housing affordability model, which uses data on mortgage, state-level income information, and real estate listings to calculate measures of availability and affordability. The new model shows a growing divide between housing availability and affordability with homebuyers at many income levels seeing an inadequate number of listings on the market within their price range in the coming months.
Lawrence Yun, NAR chief economist, stated “Home prices have ascended far past wage growth in much of the country in recent years because not enough homeowners are selling and homebuilders have not boosted production enough to meet rising demand. Amidst higher home prices and now mortgage rates, households with lower incomes have been able to afford less of all homes on the market last year and so far in 2017.”
In other housing news, new single-family home size continued along with a general trend of decreasing size during the fourth quarter of 2016, according to recently released data from the Census Quarterly Starts and Completions by Purpose and Design. This ongoing change marks a reversal of the trend that had been in place as builders focused on the higher end of the market during the recovery. As the entry-level market expands, including growth for condos and townhouses, typical new home size is expected to decline.
