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Pasadena housing market experiences rapid ascent

28 Feb 2013 5:00 PM
Pasadena housing market experiences rapid ascent

After several months of slow-but-steady recovery for the Pasadena real estate market, the beginning of 2013 has been characterized by a much more rapid ascent. According to the Pasadena Sun, home prices climbed nearly 20 percent in January on a year-over-year basis. After similar gains from December, many experts believe that the region's housing market is as healthy as it has been since before the recession.

Unsurprisingly, the surging demand had a pronounced effect on the region's supply of for-sale homes. The source reports that the number of single-family homes for sale has slid steadily since late 2012. As of January, only 118 for-sale homes remained on the market, less than half the number that were available in January 2012.

However, builders in the area have taken heed of the mounting demand and have responded by ramping up the construction of new homes. Throughout southern California, builders have reported a strong call for new homes and find it difficult to keep up, according to the Pasadena Star-News. Experts believe that the new homes currently under construction around the region will help alleviate some of the pent-up demand and provide options for increasingly competitive buyers. Ideally, the new construction will also help keep demand high in the luxury home market, which has also been undergoing a surge.

According to Patch, luxury home values throughout southern California rose sharply toward the end of 2012. In the Los Angeles area, for example, luxury home values rose 4.4 percent in the fourth quarter of 2012, which lifted the average luxury home price to more than $2 million. 

"Growing demand from buyers, low mortgage rates and a lack of inventory continued to put upward pressure on values," Katherine August-deWilde, COO of First Republic Bank, told the source. "Multiple offers are common in many high-end neighborhoods as buyers compete for a small number of attractive properties."

Although the shrinking inventory has increased competition among buyers, it has also helped buoy median prices throughout Pasadena. According to Zillow, home prices have continuously risen since early 2011. Although the year-over-year price gains are perhaps the gaudiest, many experts are paying closer attention to the month-by-month gains. Between December and January, home prices rose nearly two percent, the source reports, which is one of the sharpest monthly increases in the region.