Residents have found promise again in the land of sand and surf. In May, the median price in Southern California for new and existing houses and condos reached $295,000, up by 5.4% from the same period last year, according to DataQuick. This marked the second straight month that the median price rose from a year earlier.
The rise was driven in part by sales in relatively expensive coastal regions. San Diego, Orange County, Los Angeles and Ventura County accounted for about 70% of sales, up from 67.6% a year ago.
This comes as California's supply of homes for sale has dropped to 3.5 month's worth as of May, helping push prices higher. Bidding wars have reportedly broken out for luxury homes in wealthy enclaves of Brentwood, Beverly Hills and Bel Air as investors return to the market.
Nearly 30% of mortgage borrowers owe more than their homes are worth. And while rising prices could be good news for such borrowers waiting to put their properties up for sale, it remains to be seen if prices will move higher. The much-talked about shadow inventory remains a concern. And access to credit could pose a hurdle as banks have tightened lending standards.
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