Home shoppers waiting for price drops may be out of luck.
Southern California house price gains are accelerating, and there’s no end in sight for an 8 1/2-year streak of rising prices, home data firm CoreLogic reported Tuesday, Jan. 5.
House prices jumped 10.8% in the 12 months ending in November in the Inland Empire, according to CoreLogic’s Home Price Index. In Los Angeles County, prices rose 7.2% from a year earlier, and Orange County prices rose 6.5%.
November’s appreciation rates for Orange, Riverside and San Bernardino counties were the biggest in more than six years. L.A. County’s price gain was the biggest gain in 2 ½ years. Appreciation was more than double November 2019 rates — and triple appreciation rates in Orange County.
“The continued rise in home prices increases down payment requirements and exacerbates the housing market’s affordability issues, leaving lower-income families in rentals and priced-out of the home-purchase market,” CoreLogic said in a news release.
Despite the pandemic, home prices and sales have been strong since early summer. All-time low mortgage rates, high buyer demand and a shortage of sellers because many may fear opening up their homes up to strangers are among the main reasons for the gains, CoreLogic analysts said. Demographics also played a role, with the population rising for people in their 30s, considered the prime age for first-time homebuyers.
“While the pandemic left many in positions of financial insecurity, those who maintained employment and income stability are … incentivized to buy given the record-low mortgage rates available,” CoreLogic said. “This is increasing buyer demand while for-sale inventory is in short supply.”
The Home Price Index, which is based on sales of existing single-family homes, is considered a more reliable indicator of property values since it relies on a same-home price comparison that’s similar to the one used in the Case-Shiller Home Price Index. Both indexes compare each home’s sales price to its prior sale, eliminating fluctuations caused by changes in the type of homes sold.
Nationally, home prices increased 8.2% in November. CoreLogic predicted U.S. home prices will continue rising this year with a gain of 2.5% by November. L.A. County prices are expected to rise 3.5%.
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