Explaining Southern California's economy

SoCal home sales surge, but cash is king and "flipping" is back

David Paul Morris/Getty Images

A sold sign is posted on a fence in front of a newly constructed home in the Oakbridge housing development in Danville, California.

Southern California got clobbered during the housing downturn. But it’s still a great place to live, something that bargain-hunting investors have figured out. 

Case in point: February was the best year for home sales in Southern California in six years, reported real-estate analytics company DataQuick.

But even though the SoCal housing market is improving, it’s anything but normal.

So-called “absentee” buyers—investors and second-home shoppers—accounted for a record 31 percent of home sales in the region last month.

And all-cash buyers snapped up more than a third of all homes for sale.

“Flipping”—buying a home and then quickly reselling it—is also back in vogue. The number of homes sold and then resold in six months jumped from about 4 percent in February 2012 to 7 percent last month.

This is making it tough for everyday buyers to get in on the action, as they get priced out and housing inventories fall to new lows.

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