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The median home price in Los Angeles County and statewide is up significantly for January of this year over the same month in 2013, according to a report published by the California Association of Realtors.
According to that report, the median home price in the county has increased 21.1 percent to $423,570, while the median price of houses throughout California is up 22.1 percent to $410,990.
Lack of inventory can explain much of the jump in home prices, said Ray Wells, a real estate agent with Teles Properties in Pasadena. This backed up by the fact that sales are down in 2014 more than 13 percent, both in the county and statewide.
Nonetheless, someone’s out there making home purchases.
“It’s the best start to a year I’ve had in 28 years of doing this,” Wells said. “It just continues to be a very strong market with the demand so high and not enough inventory. We’ve seen a lot of multiple offers. For the buyers it can be very frustrating because they’re dealing with all cash offers most of the time.”
He also said the market has shifted from where it was a couple of years ago.
“It’s definitely a seller’s market,” Wells said. “It was a little softer (two years ago). It just seemed to switch – as it does – on a dime.”
Wells’ colleague Donna Baker, who works as an agent in Teles’ Monrovia office, agreed with Wells, adding there just aren’t a lot of deals out there right now.
“It has driven up prices, which is good for the sellers at this point,” Baker said. “Buyers still feel like it’s a buyer’s market when it really is a seller’s market. There are very few distressed properties anymore. People are over water instead of under water again, which is nice.”
While she doesn’t want to compare what is going on now to what went on in the last decade, Bakers said all-cash offers are driving up prices in the San Gabriel Valley.
“What I see happening right now is things are sort of being artificially inflated because of the all-cash offers that don’t require appraisals,” she said. “When there’s no appraisal required they overpay for the house. It’s sort of a double-edged sword. It helps sellers with their values, but it also causes problems for conventional buyers that have to get a loan.”
(Shel Segal can be reached at firstname.lastname@example.org. He can be followed via Twitter @segallanded.)
By Shel Segal