Monday, September 12, 2005

Bubbletalk "Shrugged Off" in LA

Supposedly all this talk of a housing bubble is just wasted air in Los Angeles, this despite LA's housing costs being so high that only a six-figure income can afford to buy even a modest home here. (See this post about that.) This story is from Los Angeles Business Journal reporter Andy Fixmer:
L.A. homebuyers in August shrugged off increasingly dire warnings of an overheated housing market, driving prices higher while stepping up the pace of purchases.

The median price of an existing single-family home in Los Angeles County in August was $520,000, according to data provided by Melville, N.Y.-based HomeData Corp. That compares with $425,000 for the like period a year earlier and $515,000 in the previous month.

Meanwhile, the number of L.A. County home resales rose to 12,107, a 9.1 percent jump from the 11,094 homes sold in August 2004. August’s sales volume was up nearly one-third from the 9,294 homes that traded hands in July – evidence that despite news reports warning of risky mortgages, overbuilding and speculation, buyers continue to be aggressive.

“People are quite anxious to take advantage of still-low interest rates,” said Stanley Smith, a senior vice president with Sotheby’s International Realty. “At the same time I wouldn’t call it frantic behavior. The appearance of a frenzy is really just a large number of buyers bidding on a limited number of homes for sale.”

— The Boy in the Big Housing Bubble