by Calculated Risk on 6/11/2013 01:43:00 PM

From DataQuick: Southland May Home Sales Highest in 7 Years; Median Price Hits 5-Year High

A total of 23,034 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was up 7.6 percent from 21,415 sales in April, and up 3.8 percent from 22,192 sales in May 2012, according to San Diego-based DataQuick.

Last month’s sales were the highest for the month of May since 30,303 Southland homes sold in May 2006, but they were still 10.1 percent below the May average of 25,617 sales since 1988, when DataQuick’s statistics begin. Over the last seven years Southland home sales have been below average for any particular month.
...
“We’re deep into uncharted territory: Amazingly low mortgage rates, a razor-thin inventory of homes for sale, and the release of years’ worth of pent-up demand. Plus there’s a seemingly endless stream of investors and non-investors who pay cash and thereby avoid the loan-qualification process. How this all plays out is educated guesswork at this point. Understandably, speculation continues over whether another housing bubble is forming,” said John Walsh, DataQuick president.

“History suggests that’s a tough call early on. What seems obvious is that if prices keep rising fast they’ll cause many more people to list their homes for sale, and that increase in supply should at least slow the rate of price appreciation,” he said.
...
Last month foreclosure resales – homes foreclosed on in the prior 12 months – accounted for 10.8 percent of the Southland resale market. That was down from 12.4 percent the month before and down from 26.9 percent a year earlier. Last month’s foreclosure resale rate was the lowest since it was 10.0 percent in August 2007. In the current cycle, foreclosure resales hit a high of 56.7 percent in February 2009.

Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 17.7 percent of Southland resales last month. That was the same as the month before and down from 24.3 percent a year earlier.
...
Buyers paying with cash accounted for 31.9 percent of last month's home sales, compared with 34.4 percent the month before and 32.1 percent a year earlier. The peak was 36.9 percent this February, and since 1988 the monthly average is 16.1 percent.

Distressed sales are down in SoCal, and foreclosures are back to 2007 levels (although short sales are much higher). Overall sales in SoCal were the highest for May since 2006.

On Walsh's "bubble" comment - I wouldn't call this a "bubble", and I agree with Walsh's comment that supply will probably start to increase and that should slow the price increases.