Demand for new homes in Southern California remains stable and average prices have been flat for the past year, according to a market report by Real Estate Economics, a real estate information company.
The fourth-quarter 2005 market report, which includes data from Ventura, Los Angeles, Orange, San Diego, Riverside and San Bernardino counties, shows that total inventory of new homes for sale is up about 15.9 percent, while monthly sales are up about 29.4 percent since fourth-quarter 2004.
The pace of new-home sales throughout Southern California was 9,226 sales per month in fourth-quarter 2005, with an average sales rate per new-home development of 7.3 sales per month.
While inventory has risen, the months’ supply of inventory has dropped 10.4 percent from fourth-quarter 2004 to fourth-quarter 2005 based on the pace of sales and the construction of more new-home communities, Real Estate Economics reported.
The average of minimum lot sizes in new-home developments dropped 9.2 percent from fourth-quarter 2004 to fourth-quarter 2005, falling from 7,148 square feet to 6,490 square feet.
While average new-home prices have been roughly level during the past 12 months, the average price per square foot, at $266.77 in fourth-quarter 2005, increased by 5.5 percent in that time, the company reported. The average base price of new homes in Southern California was $634,836 in fourth-quarter 2004, and increased 0.4 percent in fourth-quarter 2005 to $637,629.
“This trend of only modest to moderate new-home price appreciation is likely to continue in most areas of Southern California. New-home price appreciation will continue at much lower levels during the next few years due to the impact of the already high level of new-home prices, slowly rising mortgage interest rates, increasing competitive supply and only moderate economic growth,” the market report states.
“New-home demand remains intense, but prices have finally brought the new-home market into balance, resulting in much more normal market patterns during the next year.”
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