Los Angeles and Orange counties ranked a middle-of-the-road 13th.
By JONATHAN LANSNER | firstname.lastname@example.org | Orange County Register
PUBLISHED: March 18, 2021 at 7:27 a.m. | UPDATED: March 18, 2021 at 7:27 a.m.
“Bubble Watch” digs into trends that may indicate economic and/or housing market troubles ahead.
Buzz: The Inland Empire had the nation’s fourth hottest housing market in February when ranked against the 25 largest metropolitan areas. Los Angeles and Orange counties ranked a middle-of-the-road No. 13.
Source: My trusty spreadsheet analyzed Realtor.com data of year-over-year changes in median asking prices, pending sales and active listings. Remember Realtor.com’s figures are from listing data — not closed sales — of existing single-family homes.
The relatively affordable San Bernardino and Riverside counties came in near the top of the metros with a 19% jump in median asking price to $498,000; 13% more escrows; and 65% less inventory — the biggest supply drop among the 25.
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Compare that with costlier L.A.-O.C’s 24% price gain to $1.18 million; 17% more escrows; and 19% fewer homes to buy.
Low mortgage rates have spurred frenzied buying, which nudged sellers to seek more than top dollar for their homes.
Ponder the median changes over 12 months for the top 25 markets: 11% price gain to $386,000; 19% more escrows; and 44% less inventory.
It’s an even bigger trend among the nation’s 300 largest markets: 12% price gain to $304,000; 21% more escrows; and 56% less inventory.
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But these are by no means universal trends — at least in February.
Top 25 leaders were cities that, politely speaking, are older and more affordable Eastern towns with economic turnabouts in the works.
No. 1 Philadelphia: 12% year’s price gain to $393,000; 366% more escrows; and 46% less inventory.
No. 2 Baltimore: 1% price gain to $322,500; 412% more escrows; and 59% less inventory.
No. 3 Detroit: 20% price gain $275,000; 59% more escrows; and 56% less inventory.
At the bottom of the Top 25 were pricier places that were seen, pre-pandemic, as hot properties.
No. 25 San Francisco: 8% year’s price gain to $1.02 million; 21% more escrows; and 4% less inventory.
No. 24 Miami: 3% price drop to $399,000; 35% more escrows; and 33% less inventory.
No. 23 Denver: 2% price drop to $550,000; 19% more escrows; and 42% less inventory.
On a scale of zero bubbles (no bubble here) to five bubbles (five-alarm warning) … FOUR BUBBLES!
It’s been suggested that buyers are seeking remote living, but it looks to me that it’s more about value. Just look at the relative affordability of the top four metros.
And if the buying binge’s motivation is really bargain-seeking, these eye-catching price hikes and slowly rising mortgage rates will spike, sooner or later. This raises more than a few questions about this homebuying rally’s durability.
Please note: Bubbles don’t always bust into spectacular, headline-grabbing collapses!