The South Bay Real Estate is Hot

[pulsehover_text preset_name=”1″]The Southern California housing market has settled into a typical seasonal pattern in September, with sales falling from August sales, however prices continued making big gains over last year, same period. The median home price across the six county region increased 21.3% over last year. The median price did slip $3,000 from August, the first month to month decline since February. It was basically flat all summer.[/pulsehover_text]

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Real estate in several California markets continued to heat up while the median list price of homes across the nation rose compared to a year ago, according to the Realtor.com® National Housing Trend Report for the month of June 2013.

California is the comeback kid of the housing recovery. Though home prices are making annual gains not seen since 2006, The Golden State sticks out as one where they are on a startlingly dramatic swing upward.California prices have posted double-digit hikes on a year-over-year basis for eight consecutive months. In other words, they’re rising fast — very fast.And now California is sweeping the top cities where home list prices are rising the fastest. Six of the top seven cities — which all saw list prices jump more than 20 percent year-over-year in February — are in California, according to Realtor.com. That’s great, but perhaps a little scary.

As some experts have been warning recently, housing conditions like California’s could be an early sign that we’re headed into another housing bubble. Buyers all over the state are getting into bidding wars, home prices are on a steep incline that some say is unsustainable, and open houses are once again attracting a frenzy of house hunters.

So should California, despite all its encouraging news, be making us worried? Not necessarily.”It’s important to put these increases [in home prices] into perspective,” said Errol Samuelson, president of Realtor.com. “Despite these gains, home prices nationally in January were still 21.4 percent lower than they were at the peak of the housing boom in June 2006.In California, the losses were much worse. Homeowners lost more than half the value of their homes when prices fell.

Today, California prices are still 34.8 percent below the peak level. California prices haven’t even recovered half of what was lost.”There’s another reason today’s sharp increase in prices differs from the days of the housing bubble: There are real fundamentals behind them.Solid job growth in California’s coastal areas are putting more buyers in the market, allowing sellers to raise prices because of demand. At the same time, housing inventory is lower than it has been in a decade.Government regulations are preventing another housing boom based on unqualified buyers being able to snag mortgages that they couldn’t afford in the first place.

So for now, what’s happening is just a strong recovery, not a bubble. It is rather surprising how fast prices are bouncing back in California.It’s been a rough four or five years with home values collapsing and banks foreclosing. Terms like “underwater” and “upside down” are the new language of real estate. Now there are signs that the “bad old days” may be coming to an end. Prices are climbing again, up to 7 percent compared to a year ago.Now we are seeing houses go on the market and they are off the market in a week or two with seven, eight, nine offers, and often above listing price. The real estate hot spots are Pasadena, the Inland Empire, and anything along the coast.