Southern California home sales rise in January

Associated Press

SAN DIEGO (AP) -- Southern California posted its strongest home sales for a January in six years amid heavy buying by investors, a research firm said Wednesday, raising concerns that recent strength in the market rests to some extent on speculators.

There were 16,058 homes and condominiums sold in the six-county region, up 10.6 percent from 14,523 sales a year earlier, DataQuick said. It was the largest January tally since 18,128 homes sold during that month of 2007.

The median sales price was $321,000, down slightly from $323,000 in December but up 23.5 percent from $260,000 a year earlier. It was the 10th straight month of year-over-year increases.

Absentee buyers — mostly investors and second-home buyers — bought 30.7 percent of the homes sold, up from 28 percent a year earlier and the most since DataQuick began keeping track in 2000.

Cash buyers accounted for 34.9 percent of homes sold, up from 32.2 percent a year earlier and well above the monthly average of 15.8 percent since DataQuick began keeping track in 1988.

DataQuick President John Walsh cast doubt on predictions of another housing bubble, saying the market was still climbing out of a deep hole. Still, he said sharp gains in segments of the market may prove unsustainable.

"A lot of today's housing demand is fueled not by spectacular job growth and soaring consumer confidence, but by super-low mortgage rates and unusually high levels of investor and cash purchases. Take away any one of those elements and it will matter," Walsh said.

Pricier, coastal regions posted the strongest sales gains. Orange County, the most expensive with a median price of $460,000, saw sales soar 29.9 percent from last year. San Bernardino, the most affordable with a median price of $177,500, posted the most sluggish growth, eking out a 4.2 percent gain.

Sales above $800,000 nearly doubled, and sales between $300,000 and $800,000 increased by half, while sales below $300,000 fell 12.2 percent.

Foreclosed properties made up a smaller part of the sales mix, lifting the median sales price because they tend to sell at steep discounts. Homes that had been foreclosed upon in the previous year made up 15 percent of existing home sales, down from 32.6 percent a year earlier and 56.7 percent in February 2009.