The Southern California property market is showing signs of warming after a corona virus slump.
Sales are still below last year's level, but have risen sharply since spring, when orders to stay at home have virtually frozen the market.
Some real estate agents say they even see bidding wars.
"Each location receives multiple offers," said Amber Dolle, an agent specializing in the San Fernando Valley.
This level of activity may not continue.
COVID-19 cases increased across California when the economy reopened, causing the state to re-impose some restrictions. But for now, potential buyers who still have the financial means seem to be trying to get their hands on mortgages with rock-bottom rates.
The latest evidence came last week when data company DQNews released June figures.
Sales in the Southern California region with six counties increased 43.5% from May. This was the largest increase ever recorded in a record from 1988 from May to June.
Revenue was still at a record low in June, down 15.2% from the previous year. However, transactions declined 45% year over year in May and decreased 31.5% in April.
The region's average selling price rose 2.9% year over year to $ 555,500 in June, a record high. The median is the point at which half of the houses were sold for more and half for less.
Real estate agents said bidding wars were becoming more common as buyers re-entered the low-stock market with cheap mortgages as the economy reopened.
The average interest rate on 30-year fixed rate mortgages recently dropped below 3% for the first time and was 3.01% last week from 3.75% last year, said Freddie Mac.
Many vendors pulled their homes off the market this spring after home stay orders took effect and fears of the corona virus increased. Offers have increased since April, but the number of properties for sale in the Los Angeles and Orange counties was 26% lower last year than last month, Zillow said.
Mark Perez, a real estate agent in the Los Angeles area, said more sellers are not listing their homes because they underestimate demand.
This may be understandable if the unemployment rate in California is almost 15% and there is no vaccine against the coronan virus.
However, Christopher Thornberg, founding partner of Beacon Economics, said that most layoffs are currently temporary and focus on low-wage sectors such as retail, where fewer people have the opportunity to buy a home at all.
The federal government has also pumped money into the economy through one-time cash payments, expanded unemployment benefits, and small business loans. And with fewer ways to spend money, some households save more and wonder what to do with their extra money, Thornberg said.
"The fact that the property market is not getting any better is a lack of inventory," said Thornberg.
Indulgence programs that help borrowers delay mortgage payments could also help keep prices high and inventories low. Experts say that home sales tend to decline before prices fall in a market downturn because sellers are reluctant to lower their prices until they have to.
According to the CARES federal law, borrowers with a state-backed mortgage can delay payments by up to a year if they have a financial setback due to the corona virus.
This means that many struggling homeowners do not go through foreclosure or are forced to sell quickly to ward off this credit-damaging prospect.
However, forbearance eventually ends and borrowers can lose their homes if they cannot afford to make up for the missed payments. The resurgent corona virus also threatens to throw more people out of work, while the expanded unemployment benefit under the CARES law will soon expire.
Thornberg said the longer the pandemic continues, the more likely it is that people will lose their jobs permanently and "that long-term damage will catch up with the real estate market."
But that will take time, he said, and he does not expect the pandemic to continue long enough to bring property prices down sensibly.
For her part, San Fernando Valley agent Dolle is preparing for a slowdown and believes the market is going up.
Perez, the other agent, agreed.
"It cannot go on at this pace as record unemployment and the number of small businesses increase," he said. "It's just not sustainable."
Here's how sales data for June was broken down by county:
In Los Angeles County, sales rose 40.8% compared to May and decreased 24.3% year-on-year. The average price rose 4% year over year to $ 643,000.
Orange County sales increased 49% compared to May and decreased 22.1% yoy. The average price rose 4.1% year over year to $ 765,000.
In Riverside County, sales increased 38.9% over May and decreased 12% year over year. The average price rose 7.8% year over year to $ 430,000.
In San Bernardino County, sales increased 36.6% compared to May and decreased 3% compared to the previous year. The average price rose 7.4% year over year to $ 365,000.
In San Diego County, sales increased 52.9% compared to May and decreased 2.4% compared to the previous year. The average price rose 1.7% year over year to $ 600,250.
Ventura County sales increased 49.7% compared to May and decreased 23.9% yoy. The average price rose 3.5% year over year to $ 600,000.