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Home prices all time high up 5.5%. Los Angeles County's median home price is $492,000 with sales up 13.5% from a year ago. Most economists still predict continued appreciation but at a slower pace due to the increased cost of housing.

Southland home sales hit a nine-year high; prices up 5.5%

By Andrew Khouri - August 18, 2015

The Southern California housing market is enjoying a summer almost as hot as the weather.

Home sales reached a nine-year high in July, while the median price climbed 5.5% from a year earlier, according a report out Tuesday from CoreLogic.

The data represent a housing market that's picked up steam from a sluggish 2014, as an improved economy gives more families the confidence to buy a home. June sales also were at a nine-year high.

"Much of today's demand stems from job growth, low mortgage rates and a more confident consumer," CoreLogic analyst Andrew LePage said.

The 16.9% increase in sales from July 2014 comes as investors pull back from the marketplace, leaving more breathing room for families.

In July, absentee buyers, who are mostly investors, bought 21% of all homes sold, the smallest share since June 2010. All-cash transactions, often the sign of an investment deal, also fell to 21.7% of sales, the lowest since November 2008.

Real estate agents say some families have jumped into the market given all the talk about a coming rise in interest rates if the Federal Reserve raises its short-term benchmark rate later this year, as expected.

The robust demand pushed sales up in six Southland counties: Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura.

In Los Angeles County, sales jumped 13.5% from a year earlier. The median price, the point where half the homes sold for more and half for less, rose 4.7% to $492,000. In Orange County, sales were up 15.5% and prices increased 5.3% to $615,000.

The six-county region's median price ticked down 0.9% from June to $438,000. But LePage said such a month-to-month dip is not unusual and probably represents a shift in the mix of homes selling.

Most economists predict continued price appreciation ahead, though at a slower pace than in recent years as families struggle to afford the increased cost of housing. The California Assn. of Realtors expects that by the end of December the median price for a California single-family home will have risen 5.3% in 2015.

Source: http://www.latimes.com/business/realestate/la-fi-july-home-prices-20150819-story.html

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The jumbo loans market is getting bigger with some banks only requiring a 15% down payment for jumbo loans up to $1.5 million.  It's been a 58 percent increase in new loan originations from a year ago and an area of the mortgage market that has recovered more than any other sector since the housing crisis.

Banks Are Loosening Up on Jumbo Loans

Daily Real Estate News | Thursday, August 06, 2015 

 

As lenders try to capture more of the high-end housing market, J.P. Morgan Chase announced that it's loosening the underwriting standards for issuing jumbo mortgages, those that exceed $417,000 in most parts of the country or $625,500 in pricier areas. The bank is lowering its minimum credit score and down payment requirements for mortgages up to $3 million.

Chase's decision follows similar steps from Bank of America Corp., Wells Fargo, and other banks for jumbo mortgage requirements.

As such, the jumbo market is getting bigger. Jumbo originations in the second quarter climbed to an eight-year high of $93 billion – a 58 percent increase from a year ago, according to Inside Mortgage Finance estimates. Jumbo mortgages issued by lenders last year accounted for about 20 percent of all first-lien mortgages, up from 5.5 percent in 2009.

"There's no question that the jumbo market has probably recovered more than any sector of the mortgage market since the housing crisis," says Guy Cecala, publisher of Inside Mortgage Finance.
J.P. Morgan plans to lower its minimum FICO credit scores for jumbo mortgages from 740 to 680 for loans on primary single-family purchases, second homes, and some refinances. The bank is also allowing a 15 percent down payment for loans up to $3 million. That is less than other banks such as Bank of America and PNC Financial Services Group Inc. which allow a 15 percent down payment for jumbo loans up to $1 million and $1.5 million, respectively.

The housing recovery has been strong in the higher-priced tier. Existing single-family home sales priced between $750,000 and $1 million rose 21 percent in June from a year prior, according to the National Association of REALTORS®. Meanwhile, sales of homes priced between $100,000 and $250,000 rose 12.5 percent. Homes priced lower saw sales fall 3 percent.

Source: http://realtormag.realtor.org/daily-news/2015/08/06/banks-are-loosening-up-jumbo-loans