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Wednesday, Feb 21, 2024

Home Sales Slip With Expiration of Tax Credit

Home prices in Los Angeles County held steady in June for the third consecutive month, but year-over-year sales fell as a popular federal tax credit expired.

The median price of a home remained at $350,000 – its high point since the market began its recovery in spring 2009 – even as sales fell 5 percent from June 2009 to 5,710 units, according to data provided by HomeData of Hicksville, N.Y.

Stuart Gabriel, a professor of finance and director of UCLA’s Richard S. Ziman Center for Real Estate, said the local market may be stronger than the data indicates at first glance.

He noted the market only slightly weakened despite the expiration of the $8,000 credit, which required buyers to enter escrow by April 30. Gabriel believes many buyers took advantage of the credit earlier.

“A combination of extraordinarily low mortgage interest rates and substantially reduced house prices have made housing more affordable today than it has been in some time and is attracting buyers back into the market,” he said.

More than 2,100 condos changed hands, a 7 percent drop. Condo prices, meanwhile, were $305,000, slightly off the previous month and a year ago.

Some of the county’s outlying areas, including Palmdale and Lancaster, which were hit the hardest during the housing bust, saw the biggest price jumps in June.

In Lancaster’s 93534 ZIP code, for instance, the median home price jumped 56 percent to $106,000, while the median condo price surged 80 percent to $115,000. In Palmdale’s 93591 ZIP code, median home price rose 32 percent to $79,000 and median condo price jumped 64 percent to $74,000.

“The rough sense is that prices have hit bottom in those outlying areas,” Gabriel said. “Prices have come down so far in the outlying areas that the significantly lower level of prices has become very attractive.”

Not every city saw such increases, however. Several L.A. neighborhoods, including Hancock Park and South Figueroa, saw home prices drop by 25 percent. Palos Verdes Estates, meanwhile, had the biggest condo price decline, falling 58 percent.

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