Southern California Market Not Slow in August

Record prices and near-record sales pace ended the summer of 2005 in August. The median price in Los Angeles County rose to $494,000, up from $407,000 in August of 2004, the greatest percentage increase in Southern California counties. San Bernardino County's median price was the lowest at $344,000 for a single family home, while Riverside County rose from $344k to $388k from August, 2004. Interest rates are still low, despite several times showing an upward trend before slacking off. Click here for Dataquick's article.

Slowing Economy?

The 30-year fixed rate mortgage held around 5.8 percent, and rates on other mortgage products took a slight drop as recovery from Hurricane Katrina begins. In Los Angeles area the average was 5.84 percent for 30-year-mortgage rates. It is yet to be seen how much the flow of money into damage areas will affect housing costs in the rest of the country, but new home costs could rise a few percentage points, putting downward pressure on interest rates in the future.

New Homes Construction in Long Beach Marina

The site of the Seaport Marina Hotel at where Second St. meets Pacific Coast Highway may turn into 425 new homes by Lennar Homes. A lot of traffic mitigation, parking and city infrastructure impacts are up for community discussion. The addition of retail commercial in the 11-acre site will obviously be very significant at the already impacted intersection. Other commercial developments proposed for one of the last remaining open areas in Long Beach are also currently proposed. Read more about local development.

California's Inland Empire Sees Surge in Housing Starts

After visiting several developments last weekend, it's obvious Riverside County growth in former open land is seeing constant price growth. Developers push higher density--bigger houses on smaller lots--in very recent developments compared to those of 4-5 years ago. This is the new housing growth in Southern California. "... -- the second quarter of 2005, 39 percent of the new homes sold in the Inland Empire were priced between $325,000 and $424,000, up from 24 percent in the second quarter of 2004, ... . By contrast the lower price range of $250,000 to $324,000 represented only 13 percent of the market, down from 19 percent a year earlier." This surge in population is not always accompanied by the infrastructure, i.e., new and wider roads, but it will have to come with time. See article for more information.

Long Term Interest Rates Down

According to Inman News, "Long-term mortgage interest rates were lower Wednesday, and the benchmark 10-year Treasury bond yield dipped to 4.01 percent.

The 30-year fixed-rate average fell to 5.26 percent, and the 15-year fixed-rate sank to 4.86 percent. The 1-year adjustable was down at 3.85 percent.

The 30-year Treasury bond yield fell to 4.25 percent.

Rates are current as of 7:15 p.m. Eastern Standard Time.

Mortgage rate figures are according to Bankrate.com, which publishes nightly averages based on its survey of 4,000 banks in 50 states. Points on these mortgages range from zero to 3.5."

The Median Home Price is $540,900--and Rising?

The California statewide price increased 1.3 percent compared with one year ago, according to C.A.R. Mortgage rates are still low, in fact have declined slightly from recent weeks, and the home inventory is slightly improved compared to 2004, according to this report. See DataQuick's tables listing median home prices in California cities and counties here. Desert areas are now seeing a "catch-up" compared to one year ago: Desert Hot Springs increased 55.5 percent, Twentynine Palms increased 74 percent. Palos Verdes Estates also jumped up 81.5 percent compared to one year ago. The greatest median home price increase was Reedly at 89.4 percent.

Pressure on Decentralized Markets

The Bay Area and Southern California are two of the highest priced rental markets in the country, and renters need to make 4-5 times the minimum wage to pay their rent. In the future, non-metropolitan markets may expect to see more housing development and population growth because land is cheaper to build on. First-time buyers have an increasingly difficult time breaking into the local market. The line drawn for percent of income spent on housing used to be 25%--it now reaches into 30-50% of the homeowner's income. See the State of the Nation's Housing 2005 from Harvard's Joint Center for Housing Studies for more.

Market Sales Eased in July

While the price of a single family home continued to rise, July sales in Southern California slowed somewhat from June's record-breaking tempo. While there are frequent predictions of a real estate bubble bursting, DQNews isn't making that prediction as of now. Today's article about the slowing of sales in the Los Angeles Times Business Section also talks about pockets of the market that move up or down more slowly than others. All in all, the typical monthly mortgage payment was month in Southern California was close to $2100, up from $1850 a year ago.

California Still #1 Place to Live

A Harris Interactive online poll find that California, Florida and Hawaii are the states U.S. adults say they would choose to live in its sixth consecutive survey. There has been surprisingly little change since the 2003, the time of the last survey. At the same time, the median home price in California requires an income of over $120,000, so are people just wishing and hoping while they are online taking that poll?

Greetings from a summer day in Long Beach.