He said basically two factors are keeping inventory tight.
First, there’s a lack of land in the county where new homes can be built. Second, potential home sellers are watching rising median prices, which recorded a dramatic 20% year-over-year increase last year. They’re wanting to see if there’s a similar spike this year, even if it’s a more modest 15%.
“When potential sellers are seeing the market improve, they like to hang tight,” Habibi said.
However, he doesn’t see another surge happening. Instead, he predicts more like 6% to 8% price increases for the next two to three years.
The median price of a single-family home in Burbank rose about 14%, from $556,000 in January 2013 to $635,000 last year, according to Benz’s statistics. The median price for a condo was $414,000 last month, a 20% hike from $345,000 in January 2013.
Habibi said another factor thinning the housing inventory is tied to potential buyers who have become more affluent in recent years and would like to purchase a bigger, more expensive home.
“The move-up buyer doesn’t have a lot of options,” Habibi said, because, again, the number of homes for sale remains low.
Looking at sales, transactions closed on 45 homes last month, more than doubling the 22 sold in January 2013. Condo sales also grew slightly, from eight a year ago to 10 last month.
Habibi also said sales of high-end homes priced over $5 million are “on fire.” While there may not be many of them on the market, the ones that are for sale are fetching “egregiously high” prices, he said.
“It’s the widening gap of the haves and have-not,” he added.
Follow Mark Kellam on Twitter: @LAMarkKellam.
Burbank Unified teachers, superintendent get a salary bump
Airport moves to vacate street from public rolls
U.S. Supreme Court will not review decision involving former Burbank police detective