The housing market may have hit bottom, but don’t look for a rebound anytime soon.
Home prices and sales in L.A. County held relatively flat in September. That’s a bit of a comedown from the summer, when home sales hit an 18-month high in June, and steadily increased in July and August.
About 5,545 new and existing homes were sold in the county last month, according to figures provided by HomeData Corp. of Hicksville, N.Y. Adjusting for the difference in the number of selling days per month, that’s a decrease of 2.5 percent from August.
The median sales price in September was $335,000, a jump of $5,000 from the August price. It’s the fourth jump in the five months since the low of $303,000 in April.
Taken together, the sales and price data suggest the market has leveled out. But people who follow the local real estate market cautioned that it will likely take months before the market sees a sustained improvement, partly because recent housing sales have been artificially aided by the federal government. Also, bank-owned inventory will have to make its way through the market.
“The elevator’s at the ground floor, but it’s not going to go up for quite a while,” said Paul Habibi, a professor of real estate at the UCLA Anderson School of Management.
A recent survey of national home data lent credence to the view that the housing market has finally bottomed out.
Prices of homes in 20 metropolitan areas increased in July by 1.6 percent compared with the previous month, making July the third consecutive month in which home prices increased, according to the S&P/Case-Shiller index released Sept. 29, a widely followed barometer of home prices.
The S&P/Case-Shiller index is now at roughly the same level it was at in 2003 – when housing prices were beginning to skyrocket.
But experts point to several factors that make it unlikely home prices are going to climb at the rate they did during the bubble. Much of the current demand is fueled by the federal government, which has kept interest rates artificially low. The government is also offering a tax credit of up to $8,000 for qualified buyers.
Unemployment will also have to show signs of a turnaround before any substantial reversal occurs in the housing market – and last month the unemployment rate hit a 26-year high.
Meanwhile, banks are holding on to properties instead of foreclosing on them, meaning that some bank-owned houses are not currently on the market. While no firm count of such properties exists, Habibi said an estimated 3 million delinquent borrowers around the country are not in foreclosure.
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