The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
La Jolla, Calif. (
) -- The Southland housing market posted the highest number of February home sales in five years as record levels of investor and cash buyers helped spur robust activity under $300,000.
The median price paid for homes across the six-county region inched up from January but dropped below the year-earlier level for the twelfth consecutive month, a real estate information service reported.
A total of 15,573 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was up 7.2% from 14,523 in January, and up 8.4% from 14,369 in February 2011, according to San Diego-based DataQuick.
The increase in sales between January and February was larger than usual. On average, sales have risen 1.1% between those two months since 1988, when DataQuick's statistics begin. Southland sales have increased year-over-year for two consecutive months and for six out of the last seven months. However, last month's sales tally was 12.3% below the average for all the months of February since 1988.
Sales did not rise across the price spectrum last month. Transactions below $300,000 rose 9.5% from a year earlier, while the number of $300,000 to $800,000 deals dipped 0.8% year over year and sales above $800,000 fell 12.6%.
"February sales got a big boost from investors and others paying cash for relatively affordable homes, as well as from an extra day's worth of sales thanks to the leap year. Without the latter, sales might have been up a bit, but not to a five-year high. It's just one more reason for us to remind everyone that January and February usually aren't good months to use for forecasting purposes. The big picture remains one where the bottom of the housing market continues to see much of the action, while move-up activity remains sluggish. Financing is still difficult for many and lots of potential move-up buyers and sellers are stuck because they owe more than their homes are worth," said John Walsh, DataQuick president.