Median price in California nearing half a million

The Daily Bulletin ^ | Friday, September 24, 2004 - 3:42:02 PM PST | By MICHAEL RAPPAPORT, STAFF WRITER

[Smogger]

Home prices in California are inexorably closing in on a dubious milestone. With the median price of an existing single-family detached home in the state at $474,370 in August, a 2.6 percent increase from July, a half-million dollar median may be only months away.

Two Inland Valley cities already have reached that level. The median in Norco - up 40 percent in the last year - hit $524,750 last month, and Claremont - up 35.9 percent - reached $512,000, in numbers released Friday by the California Association of Realtors and compiled by DataQuick Information Systems.

Chino Hills ($487,000), La Verne ($483,000) and Corona ($450,000) aren't far behind.

Indeed, even though the median in the overall Riverside-San Bernardino metropolitan area slipped slightly from July to August, the figure of $310,120 was still 35.7 percent higher than it was a year ago.

"It's crazy for real estate people," said Bill Velto, manager of Tarbell Realtors in Upland. "Orange County is taking a beating, things are slowing in Riverside County south to Temucula, but the area around here is still hot."

It's hot all the way up to the High Desert, where the median price of $236,890 is up 45.3 percent from a year ago. Both Adelanto (57.9 percent) and Barstow (52.4 percent) were among the top 10 cities in the state for price increases.

"That's where the market is right now for home builders," said Frank Williams, chief executive officer for the Baldy View Chapter of the Building Industry Association. "We literally cannot build houses fast enough to keep up with the demand."

Velto said more than 1,800 homes were sold during August alone in the High Desert.

"That's one of the things pushing the market around here too," he said. "This corridor - Upland, Ontario, Rancho Cucamonga - is the gateway to the High Desert."

The biggest negative in the statewide report was an 8.5 percent decline in California sales over last August, although it came as no surprise to CAR officials.

"We anticipated a decrease in home sales last month compared to a year ago," said Ann Pettijohn, CAR president. "Last summer, mortgage interest rates were at their lowest levels in more than 30 years, and monthly existing home sales hit an annualized all-time high."

One sign of the slippage is that there are far more homes on the market. CAR's Unsold Inventory Index for August was 4.3 months, compared to just two months in August 2003. The UII reflects how long it would take to deplete the inventory if homes continue to sell at the current rate.

Despite the slowdown, statewide sales are strong. Leslie Appleton-Young, vice president and chief economist for CAR, said year-to-date sales were up 5.2 percent over the same period in 2003.

"Residential real estate sales in California are on track to set a new annual record in 2004," she said.

With state prices climbing and local prices going up even faster, Velto said he didn't see any end in sight.

"Prices here are going to stop going up when people decide they do not want to live here any longer," he said. "Either that or they find a reason not to live here."

[Smogger]

"It's hot all the way up to the High Desert, where the median price of $236,890 is up 45.3 percent from a year ago. Both Adelanto (57.9 percent) and Barstow (52.4 percent) were among the top 10 cities in the state for price increases."

Unfriggin believable

[BelegStrongbow]

Well, I sold out of CA, a 1100 ft house, for $400K. So, I managed to get my piece and get out.

Good luck and God's blessing on those still there, but I'd leave.

[RWRbestbyfar]

I'm in Manhattan Beach, California, and it's over a million to buy a 30 by 90 lot - the lot, mind you, if the house is anything but a tear down, you're talking 1.5 mill.

Crazy.

[VU4G10]

Can you say.. Immigration?

[demnomo]

I tried to convince my hubby to move to NC or Colorado where homes were more reasonable. We live in a 2700 sq ft house in a golf course neighborhood that we payed $259,000 for back in '89. It's worth more than twice that amount today. We should be happy, but we're not. Our taxes keep going up and there's no way we can move up. the nexy level of house goes to around $750,000. It's ridiculous. I feel so sorry for young couples starting out. I don't know how they do it. (And here I thought a 1/4 of a million for a house on 1/8 of an acre was outrageous nearly fifteen years ago!)

[Fast1]

Yeah soon only the government supported Illegals will be able to live there.

[LA-Lawyer]

My home has appreciated 30%+ each year for the past 3 years. Not that it matters since it only "paper" wealth. BTW, I remember the early '90's here in LA where the market crashed [due in no small part to the riots]. We practice bankrupcty and all of our colleagues are anticipating a sharp upswing in filings once (1) prices drop -thus people in overpriced homes are stuck and go bk because they can't afford their homes and can't sell or (2) interest rates increase and all those homeowners with adjustable rates suddenly see their monthly payment double.

[hoppity]

I told my wife we should move when we hit $500K in Oxnard. That happened two years ago. We doubled our purchase price in three+ years (from '99 to '02, $240K to $500). Now we're low-sixes, but where do we go? Maybe if our families all move with us to Texas. :-)

[SengirV]

They are still years away from reaching the average single family(detached) house price in Loudoun County, Virginia - Distant Suburb of DC.

[Smogger]

Forget Manhattan Beach..

240K to live in Barstow?

[missyme]

Leave for what?? We have the best weather all enviroments Beach, Mountains, Desert, Forests, Hills...

Your property will just keep going upupupupupupup

As a native Californian I lived in Texas and Florida for awhile YUK! the humidity you can cut with a Steak KNife Bugs rain hurricaines! Texas at least Dallas a Big Flat Concrete Jungle...

There no place like "California"

[sierrahome]

I own a 100 plus year old Victorian Cottage in a town named rocklin. The house was moved here by a pro ball player back when this town was the summer camp of the 49ers. It is only a 2 br house but has Granite outcroppings and indian grinding stones in the yard (if you know about that). I bought the home 10 yrs ago for 126,000. It appraised for 390,000 last year

[lelio]

or (2) interest rates increase and all those homeowners with adjustable rates suddenly see their monthly payment double.

I'm waiting for that day as well. In 2-3 years there's going to be some bargains on the market in California as people overextended themselves.

Up here (Seattle) there's a lot of ads on the radio to "lower your mortgage by HALF!" -- its one of those interest only loans. I suppose that works if the person's going to flip the property in a year or two, but if they aren't and instead choose to live in it they're going to have to get a regular mortgage and are going to be shocked (shocked!) when they see their monthly payments go up.

[VU4G10]

1,000 more vehicles daily increase gridlock, pollution (asthma), and dependence on foreign oil. 

Median house price is over $400,000, up $140,000 in past 3 years, as hundreds of thousands are homeless or in shanties.     80,000 units behind demand yearly.                          

"California does not have enough water to meet everyone's demands," Los Angeles Times   "The health care delivery system is incapable of meeting the present, let alone the future, needs of the American public."   Natl. Academy of Sciences

Imported labor lowers wages for poorest Americans and recent immigrants, which is why Cesar Chavez sent followers to border to stop illegals.  (2001: 1.1 million California farm employees for 388,000 jobs; annual salary $10,200.  CA Employment Development Dept.)

110,000 new students yearly into K-12 where only 21% of 4th graders are proficient in reading; over half of h. s. students not at levels needed to succeed. Colleges reject thousands - tuitions rise. 

California debt was $23 billion for past 5 years while cumulative cost of 500,000 more Hispanics and 60,000 Asians into K-12 at $7,000 each equals $11.5 billion (110,000 x $7,000 x 15).    Health care, food stamps, child care and other immigrant programs along with bonds for new schools drive present and future taxpayers deeper into debt  - subsidizing cheap labor for wealthy employers. 

Over 80% of Californians, including 74% of Latinos, say continuing growth makes the state a less desirable place to live.  The American Dream of a good life is impossible with floods of poor newcomers.   

With 45% of K-12 schools Hispanic and 11% Asian, all races must work together if our children are to inherit quality of life.  The battle is against endless growth/cheap labor for the special interests controlling our elected Congress.

http://www.slowcaliforniagrowth.com/pages/1/index.htm

[rdb3]

Unfriggin believable

You got that right!

My wife and I just moved into our new home. 3,800 sq. ft. It's nowhere near the median price of California homes.

For their median price, we could have bought two here in Dallas!

$710.96... The price of freedom
VII-XXIII-MMIV

[skeeter]

The indigenous population isn't growing, and because of the low interest rate the past few years most responsible renters have become owners.

So all housing demand must be coming from immigration.

The odd thing is, the job market has lagged behind the rest of the country here. What are all these new residents doing for a living?

[Who dat?]

They are still years away from reaching the average single family(detached) house price in Loudoun County, Virginia - Distant Suburb of DC.

I’m guessing they have pretty big/nice homes. I sold a home within the last year in the San Francisco bay area for ~$400,000. Two bedroom, one bathroom, 785 square feet. That’s seven hundred eighty-five square feet - not 1,785. It’s insane, but that’s how it is.

[sierrahome]

I love California...Living here is fantastic. The people are friendly, the traffic is easy and the prices are reasonable...time for my medication bhy-by

[Arthalion]

The rate of climb is what's absolutely shocking. I bought a new home last April, barely six months ago, and paid $230,000 for a 4/2 in a ten year old neighborhood in a decent part of town. Three weeks ago a 4/2 with a floorplan identical to my own sold just around the corner for $299,000, and a smaller 3/2 version of my house is now for sale two doors down for $315,000 (we live on a court, which apparently increases the value) and already has one $310,000 offer on the table.

By my math, I'm paying a $1,455 monthly mortgage on a house that's increasing in value by $10,000 to $15,000 a month. My neighbor across the street, who bought her house new a decade ago when they sold for $79,000, is getting ready to unload her 4/3 for a $320,000 asking price and run away to Idaho with the profits before, as she puts it, "the whole thing crashes and everyone else gets burned".

By the way, a significant portion of the rising real estate costs in much of California are being driven by investors and land speculators who are profiting handsomely off of these escalating values. In many areas, including my own, the real estate is drasically overvalued when you look at the size of the homes, lots, and the types of services available. A LOT of people are going to get burned when the market drops because there isn't the demand or the income to sustain these prices over the long term.

[Arthalion]

A real estate agent explained it to me this way:

Several illegal immigrant families get together and buy a house in an older middle class neighborhood (there are actually loan companies that specialize in loan programs for illegals). The families park their nine cars on the lawn, trash the place, and in short order chase the respectable families from the neighborhood. Since they lower the value of the neighborhood, they make it easier for other illegals to buy and convert it into a hispanic ghetto. The displaced citizen families, in the meantime, typically take the opportunity to "buy up" and purchase newer homes in nicer neighborhoods.

So the illegals are flooding the low end of the market and converting previously nice areas into slums, which drives normal people to the upper end of the housing market to escape them. Since the supply of new homes and neighborhoods is limited, the price skyrockets as the families compete for the homes.

BTW, this is another reason that many California politicians...Democrat AND Republican, are mute on the illegal immigrant issue. Many people here realize that a mass deportation of the illegals will cause a vacuum in the real estate market, which could quite easily collapse the whole house of cards. It's going to crash anyway, but nobody wants to look at that elephant yet.