Southern California Homes Going for Higher Prices

August 20, 2012 / Russell Legato, Residential Property Analyst

There is a reduction in the supply of existing properties in the residential home sales segment of the real estate industry. Median prices on these houses are higher than they have been in close to four years. Home sales are seeing more buyers looking for a property and fewer properties to choose from. This lack of an excessive supply is responsible for the current trend.

Southern California Homes Going for Higher Prices

A real estate research company, DataQuick, reports the median price of a house in the area to be $306,000. That amount is two percent higher than it was in June. The median price has gone up for the last four months. This is attributable to the supply being less than the demand for houses.

Therefore,sales decreased as compared to the previous month (6.7 percent) and were 13.8 percent higher when gauged against July 2011. All the homes and condominiums sold in this six-county area include both newly built and existing homes.

The number of foreclosed houses sold went down. Last month only one in five of the homes sold were foreclosures. One factor that contributed to the reduction in sales of foreclosures is that these bank-owned properties may be in neighborhoods that are not as popular among home buyers. Due to this, the prices are significantly reduced.

The still-low mortgage rates add to the public’s interest in buying. For example, cost on a 30-year mortgage for $150,000 with an adjustable rate after the first five years, can be obtained with a starting interest rate of 2.375 percent. Additional costs include points, homeowner’s insurance and property taxes. These will be figured in by the loan officer.

The individual with a credit rating above 740 is eligible for a 30-year fixed-rate mortgage with 3.87 percent interest. Fees, such as insurance, taxes and points may add to the final monthly payment.

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