Tuesday, July 19, 2005

The Bubble Ain't Popped Yet

A story reported today by the Associated Press explains that California's median price of a home (the midpoint of the extreme high and low) was $445,000.
Demand for California houses and condos surged in June, driving sales volume and prices to record highs even as the annual rate of home appreciation declined in some areas, a real estate research firm said Tuesday.

The median price paid for a home in California last month was $445,000, up 4.2 percent from $427,000 in May and a 16.5 percent increase over $382,000 in June 2004, according to DataQuick Information Systems.

Homes have appreciated around 40 percent since 2002, when many economists and real estate market watchers began issuing warnings that the state's housing market was in danger of overheating.

The company that collects the statistics was surprised:
"We keep expecting it to start to taper off and it just keeps going along," said John Karevoll, a DataQuick analyst.

And then there was a real estate agent from Beverly Hills who brought the reality home:
Beverly Hills-based real estate broker Rory Barish said that in most of the popular areas in Los Angeles County — where the median home price last month was $475,000 — buyers would be hard-pressed to find a single-family home for less than $500,000.

"You might be able to find something for $600,000 ... Maybe way out in North Hollywood or Woodland Hills," she said.

San Diego sounds as though it continues to cool, while the Los Angeles metropolitan area is still insane.
Some housing markets, like San Diego County, which took off in the early part of the decade, have seen appreciation rates slow to single digits. Others, like San Bernardino County, posted a 30 percent increase in June.
If anyone has any predictions, please chime in.