An article in the Daily News touts the fact that the median home price in California has increased almost 32% and is the largest price increase in 3 decades. What makes this article most interesting is the fact that no one seems to think this is a "bubble" issue because buyers have money and are more qualified then in 2006/2007. As a side note the article says that the reason for the increase is the high number of "expensive" home sales and the low number of distressed home sales.
It wasn't long ago that people were poking fun at the concept that the Manhattan Beach-Beach Cities real estate market was different from the Inland Empire and most national real estate markets.
While we definitely saw prices go down, we have seen prices move back to 2006/2007 levels very quickly. The upward swing in the market caught many buyers unaware. Most buyers thought they would have more time to "make a deal" before the market recovered.... not the case. The people who laughed at buyers who took the plunge and bought in 2009, 2010, 2011 and 2012 aren't laughing anymore.
Not all the Beach Cities have reached the high point of 2006/2007. Hermosa, Redondo and El Segundo are trying to closing the gap but at a slower pace as inventory levels continue to be low and demand remains high.
While prices are moving upward interest rates remain low which is a driving force for many buyers. Rates have been bouncing around for a few weeks as people try to figure out what the Fed is going to do in the future. However even if rates rise a bit they are still at historic lows. Contrary to what many think, a rise in rates usually spurs sales as buyers try to grab a low interest rate before they climb higher. Personally I think the Fed is going to continue supporting the market until there is a clearer sign of improvement in all sectors of the market.
As the Spring selling season winds down into summer we usually see the market gain inventory as sales slow down. While the market doesn't seems quite as frantic as it was earlier in the year multiple offers are still the norm not the exception.
This is a tough market for buyers who are looking for a "deal".... they are going to have to wait a few years until a new neighbor moves in and says in awe... I can't believe you only paid $$$$$$ for your home.
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