Data Quick reported median home prices earlier in the month up 23% year over year for April and 3.3% higher in April over March for Los Angeles. Most major US cities showed similar gains. May figures will be out around the 10th of June.
From what we are seeing on the street, I would not be surprised to see a 4% increase from April to May and 25% year over year! Inventory rates are still at all-time lows with a 2 month supply or less in most areas in Southern California.
For comparison sake, we were at a 4 month supply in 2006 the last time which was an all-time low at that time and the supply levels peaked at about 18 months in 2008. With record low inventories we did reach sales figures with the most homes sold in 5 years.
This means that homes are coming on the market at a very good rate, but selling very quickly so the inventory levels are not able to increase. It does not look like there is any end in sight, at least in the next year or so.
At some point prices will increase to a point that inventories will rise and prices will level. I would not be surprised if they go up another 20-35% before we see that! I’d expect to be there by mid-2015.