Southern California home prices reached an all-time high in February as buyers competed amid a shortage of homes for sale, adding to signs that pandemic home-buying trends are extending into 2021.
The six-county region’s median sales price jumped nearly 15% from a year earlier to $619,750, according to data from real estate firm DQNews.
Sales surged 17.6% from February 2020.
The numbers, published Tuesday, show how a pandemic housing boom driven by historically low borrowing costs and by demand for more space is extending into 2021. Another factor: Many millennials are entering their early 30s — a time when many people purchase their first home.
The data show that the increase in demand, however, has not been met by a surge in listings, leading to bidding wars and subsequent higher prices.
According to Redfin, the number of new listings coming onto the market in L.A. County during the four weeks that ended March 7 was just 4% higher than in the same period last year.
And with homes selling quickly in recent months, people had 13% fewer options to choose from over that period, the data show.
Daryl Fairweather, chief economist with real estate brokerage Redfin, said more homes aren’t coming up for sale because some owners don’t want to buy another home in a tough market, and some may have refinanced at record lows and are satisfied with their mortgage.
Some wealthy owners are also choosing to buy another house farther from their jobs, she said, but holding on to their old home, unsure where they want to settle down as the pandemic recedes and the economy starts to recover.
Builders are trying to ramp up to meet demand. But that takes time, and soaring lumber costs have made projects more difficult to get off the ground.
“New construction can’t keep up with demand,” Fairweather said.
Sales and prices are rising throughout the region.
- In Los Angeles County, the median sales price rose 14.3% to $708,500 in February, while sales climbed 19.1%.
- In Orange County, the median sales price rose 9.6% to a record $820,000, while sales climbed 13%.
- In Riverside County, the median sales price rose 16.5% to a record $465,000, while sales climbed 18.3%.
- In San Bernardino County, the median sales price rose 17.7% to a record $412,000, while sales climbed 21.5%.
- In San Diego County, the median sales price rose 14.6% to a record $672,750, while sales climbed 13.8%.
- In Ventura County, the median sales price rose 13% to $650,000, while sales climbed 23.9%.
A major factor in the sales and price boom has been a drop in borrowing costs during the pandemic, with the average rate on a 30-year fixed mortgage falling below 3% for the first time.
Rates have been on the rise in recent weeks and now average slightly above 3%. If the economy improves, rates could keep rising, but many experts expect borrowing costs to remain low by historical standards throughout 2021.