Southern California home prices rose at their fastest pace in almost two years in November as falling numbers of homes for sale pushed home prices ever higher, figures from real estate data firm CoreLogic show.
Prices for existing single-family homes in Orange County were up 6.2% in 12 months ending in November, the highest rate of gain in 21 months, according to the
Los Angeles County's house price gain also hit a 21-month high, rising 7.5% year-over-year in November.
In the Inland Empire, single-family home prices rose 8 percent. That was the second-highest gain for the Inland Empire in the past three years, topped only by October's 8.1% increase.
The inventory of homes listed for sale plunged to a five-year low in late summer, creating more competition among buyers and pushing prices higher.
Southern California had fewer than 32,000 homes for sale in the Realtor-run multiple listing service in late November, according to ReportsOnHousing.com. The region averaged more than 39,000 in that period over the past five years.
"Growing numbers of first-time buyers find limited for-sale inventory for lower-priced homes, leading to both higher rates of price growth for starter homes and further erosion of affordability," CoreLogic Chief Economist Frank Nothaft said.
Nationally, the price of a single-family home increased 7% year over year in November, CoreLogic reported. In California, prices were up 8%.
"Without a significant surge in new building and affordable housing stock, the relatively high level of growth in home prices of recent years will continue in most markets," said Frank Martell, president and CEO of Irvine, Calif.-based CoreLogic.
The data firm projected that home prices will rise 4.2% by next November.
"Low inventory will continue in 2018, as starts and listings are slower than housing demand," Sue Yannaccone, CEO of ERA Real Estate, said in an email Tuesday.
Yannaccone said 2018 is shaping up to be a close reflection of 2017, with a continued rise in home prices. The coming year also is likely to see an influx of more foreign capital into the real estate industry, particularly from Chinese cash buyers, she said.
"These investors will continue to drive up prices in coastal markets, making home ownership increasingly difficult for first-time home buyers," Yannaccone said.
CoreLogic's Home Price Index is based on "repeat sales" transactions for attached and detached single-family homes, matching each home sold to its previous sale prices to generate average annual price gains.
