La Jolla based MDX Dataquick released two important statistical measures this past week, both considered major indicators of health for the California housing market.

The first, home sales.  A total of 23,262 new and resale houses and condos closed escrow in San Diego, Orange, Los Angeles, Ventura, Riverside and San Bernardino counties last month; a figure representing roughly 53 percent of all the sales in the state. This figure is up 12 percent from 20,775 in May and up 29 percent from a revised 18,032 a year ago.  Interestingly, home sales have increased year-over-year for 12 consecutive months.

Foreclosure resales are waning (albeit temporarily) yet still represent 45.3 percent of Southland resales in June.  this is the second consecutive monthly drop down from 49.7 percent in May and down from a peak of 56.7 percent in February 2009.  The June level was the lowest since foreclosure resales were 43.7 percent of all resales back in July 2008.

The next big stat, the median home price, reflecting the price which half of the sales were lower and half were higher, also edged upward.   Likely the result of fewer foreclosures and lower end homes finding a bottom, we should all be careful not to assume this means values are again rising.  For the better part of the past 6 months the higher end housing market in California was effectively frozen.  Few new listings hit the market, lenders were nowhere to be found and more buyers waited on the sidelines.  Now that the prime selling months are upon us it would be expected that more patient sellers would test the waters.

From a more pessimistic perspective, unemployment continues to hamper the ability of wealthy homeowners to pay their mortgage.  The fortunate few able or willing to wait out the worst of our housing slowdown may now be coming to grips with the fact that prices will not likely rebound significantly in the near future.  The result is that more expensive homes come to market.

As I read through the information earlier today, I was reminded of a 10 year conversation I’ve had with a longtime friend and client about the real estate market in Southern California.  My good friend has spent the better part of that time supporting his argument that the housing market is ridiculouly overpriced and that the bubble would soon burst.  My stance was that housing prices fluctuate from time to time, however Los Angeles as a long term housing bet is simply a good one.

Feeling vindicated my friend is finally willing to become a first time homeowner.  However, given enough time isn’t every prediction correct?  The clear issue affecting value today is the amount of foreclosure or distressed properties on the market.  The general public can’t or won’t pass up a bargin, so when available these bargins are pursued.  However one item of interest I pull from the statistics is the resiliency of the marketplace.  I don’t assert that we will see an immediate jump in values or a quick return to the heady days of the real estate boom, but I do believe that Los Angeles, and the greater six counties, will always attract people to live here.

Unlike the great expanse of middle America or northern climates that produce dreary weather and limited commerce, sunny Southern California boasts the 17th largest economy in the world.  The LA region also has a larger population than 47 of the 50 states, excepting California itself, New York and Texas.  Yet beyond the gravitational pull for both economic and climate reasons, Southern California, is an essential part of the American urban fabric.  It is one of America’s great character cities.

Like New York, Chicago, Philadelphia, and San Francisco, Los Angeles is the vibrant public image of America.  One of the great cities that allow citizens to be a part of something bigger than themselves.  For that reason, the LA region will continue to be a hub and connector to other great cities around the world.  It’s proximity to the Far East means that it, along with San Francisco, will be the American link to the world’s largest population and the fastest growing economic region.  Positioned for importance and comfortable with the limelight Los Angeles is securely fit among the best for urban, social and cultural importance.

Although timing currently favors buyers over sellers, Los Angeles and it’s housing market continues to be a good bet.