A new report by the real estate information service MDA DataQuick (MDADQ) shows home sales in Southern California rising. November sales totaled 22,132 for Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties, up by 2.8 percent in October from the previous month.

MDADQ also saw “more signs of firming” in the region’s house prices, with the median in this, California’s most populous area, up 1.8 percent from September to $280,000. Year on year the median price showed a drop of 6.7 percent, the smallest such decline since September 2007.

 

 

“The [annualized] median sale price fell by the smallest amount in two years, the result of a shrinking inventory of homes for sale and government and industry efforts to stoke demand and curtail foreclosures,” the report stated.

 

 

House prices in Southern California and elsewhere in the US have been driven by people seeking to take advantage of the federal tax credit for first-time buyers, a benefit the US administration has said it will eventually withdraw as prices firm. Also record low interest rates and bargain prices have helped to post a 16th consecutive month of year-on-year gains in sales.

“The government is playing a huge role in stabilizing and, to some extent, reinvigorating the housing market,” said John Walsh, MDADQ president. “The real question now is how well can the market perform next year as some of the government stimulus disappears?”

 

 

It seems analysts are split on how sustainable this housing recovery will prove to be.

“The more upbeat outlooks suggest a strengthening economy and job market will help pick up the slack, and that demand for lower-cost foreclosures will remain robust,” said Walsh.

“The more negative forecasts assume, among other things, a much slower economic recovery, more foreclosures than the market can readily digest, and more turbulence in the credit markets,” he continued.

 

 

Observers have noted that US house price stabilization may be temporary and directly attributable to government efforts that may prove temporary. However you have to ask – would an administration prematurely reverse policy decisions that are having the desired effect? Do turkeys vote for Christmas?

 

 

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