Southern California home prices muscled to an all-time high in April as the hot real estate market got even hotter.
The six-county region’s median home price increased 20.2% year over year to a record $655,000, according to data released Tuesday by real estate firm DQNews. That’s $25,000 more than the previous median price record set in March.
The 20.2% leap is the first year-over-year increase of more than 20% since December 2013, said Becky Beavers of DQNews.
April home sales jumped 86.2% year over year with a total of 25,857 transactions, compared with 13,889 in April 2020. It’s both a reflection of the pandemic-fueled housing boom and of a market that was chilled by the coronavirus last spring as sales died in escrow and would-be sellers decided not to move.
It’s the ninth straight month of double-digit price increases, and experts credit a mix of factors including ultra-low mortgage rates, increasing demand for space and an emerging home-buying demographic: millennials.
Another contributor is the housing shortage.
There’s a glut of potential buyers but a shortage of sellers, and it’s leading to bidding wars that drive offers far above the original price tag. In March, more than half of homes in Los Angeles fetched more than the seller was asking, according to the Multiple Listing Service.
“It’s ironic,” said Compass agent Bret Parsons. “The person who determines the price of a home in this market is the buyer, not the seller. If you price a home accordingly, it will receive multiple offers automatically.”
Barron Hilton’s Bel-Air estate — a 15,000-square-foot Georgian-style mansion — has sold for $61.5 million, the priciest sale so far this year.
Both sales and prices rose in all six counties in Southern California.
“I’ve never seen so many qualified buyers struggle to buy a property,” said RE/Max One agent Jordan Cohen, adding that this is the most competitive market he has seen in 31 years of residential real estate.
This year, he has been regularly submitting offers over the asking price for his clients — some all-cash — and still losing out on homes.
Cohen said he’s not surprised the market surged in April because the March-May stretch is historically one of the busiest times for home buyers as families look to move into new school districts before the summer.