Home prices have seen significant jumps in Pasadena over the past year, outpacing price increases at the county level in three of the city’s six postal codes, according to data released by CoreLogic.
Local real estate experts say it comes down to simple supply and demand, as the market is saturated with eight times more buyers than sellers.
The median price of a single-family home in Los Angeles County in August was $750,000, representing a 14.5 percent increase over the prior year, according to the CoreLogic report.
Three areas in Pasadena saw prices surge at an even higher rate, the data shows. Only one postal code — 91103, encompassing Northwest Pasadena, the Rose Bowl, and Brookside Golf Course — saw a decrease in the median home sale price at 7.7 percent, bringing the median home price to $708,000.
Postal code 91106, including the Oak Knoll neighborhood in the central portion of the city, saw the biggest price increase at 30.5 percent, ending with a median price of $1.59 million in August.
The 91101 postal code, centered around the Playhouse District, saw single-family home prices surge by 24.1 percent to a median of $726,000.
The 91104 postal code, encompassing the city’s northeast portion, had a median home price of $1.02 million, representing an increase of 14.8 percent, according to CoreLogic.
The median home price in the 91105 postal code at the southwest end of Pasadena reached $1.8 million after climbing by 12.5 percent, while the 91107 postal code, containing the East Pasadena and Kinneloa Mesa neighborhoods, saw a median price of $1.15 million following an 8.1 percent increase.
Bill Podley, a partner at the deasy penner podley real estate firm in Pasadena, said the increases were “a function of supply and demand.”
“We simply have more buyers chasing fewer properties, and that’s, in my opinion, the reason for the continued increase in price,” he said.
George Penner, who serves as CEO at deasy penner podley, came to a similar conclusion as to the primary reason for the price increases.
“We have eight times the number of people looking to buy as we have homes for sale,” he said.
Podley and Penner also both pointed to low interest rates as a strong motivator for buyers, particularly first-time buyers.
The pandemic appears to be making some older people who might otherwise be putting their homes up for sale to downsize or move closer to family members, deciding now is not the best time for a move, Podley said.
Podley said he saw a home receive 19 offers in recent weeks. “And 12 of them were all-cash offers and at well over the list price.”
Prices are not likely to stabilize until more properties become available, he said. He added that if Proposition 19 passes, allowing senior property owners to keep their former property tax rates when selling a current home and buying a new one, more seniors would likely be more interested in downsizing their homes.
But it will not last, Podley said.
“This is my 47th year, and I’ve seen enough cycles to know that nothing goes up forever,” he said. “But we’ve had a pretty long run here of rising prices.”
Penner said while, in general, homes are expected to appreciate in value over time, the recent jumps over a single year were far above normal.
“We’re hoping that it continues, but at a more regulated pace,” he said.
“At some point, the pricing will level off and hopefully it will be a more normal market and we’ll get more inventory,” he said. “I’m cautiously optimistic.”