Los Angeles area home prices jumped 19.9 percent from June of 2012 to June 2013
New data released on Tuesday show home prices rising fast and the foreclosure rates falling in the Los Angeles housing market.
Nationwide, home prices rose 12.1 percent in June over a year earlier, according to the latest Standard &Poor's/Case-Shiller home price index. The Los Angeles market topped that with a near 20 percent (19.9) increase.
Meanwhile, Irvine-based CoreLogic says the foreclosure rate in the LA-Long Beach-Glendale area fell in June to 1.19 percent. In June of last year, nearly 2 and a half percent of home loans in the area were in some stage of foreclosure.
Richard Green, Director of USC’s Lusk Center for Real Estate says in a healthy housing market, rising home prices and falling foreclosure rates go together.
“Every month that prices go up, the number of people who are underwater on their houses goes down,” Green says. “So the number of people who have an incentive to pay [their mortgage] keeps rising.”
CoreLogic Chief Economist Mark Fleming says fewer foreclosures means fewer distressed properties being sold at a discount in the coming months.
"It's those distressed sales that influence prices, so it's good news for the future of housing in Southern California," Fleming says.
He adds that people looking to buy a home now should be aware that prices are likely to continue rising for a while.
"While you might have to compete to buy a home, particularly the distressed sales that are coming out of this foreclosure pipeline, now is the time if you're interested because it's going to get more expensive if you wait," Fleming says.