The Southland's housing market is heating up as prices have popped to their highest level in six years, new home sales are increasing and foreclosure activity is on the wane, according to reports released Tuesday.
In the Los Angeles metro area, home prices increased 10.2 percent in December from a year earlier, according to the S&P Case Schiller Home Price index.
That L.A. gain was substantially stronger than the nation's progress, a 6.8 percent average gain for 20 major markets, such as Atlanta, Minneapolis and Seattle, tracked by the index.
"That really means for many people that your home appreciated in value over the past year and that is a welcome sign," said Robert Kleinhenz, chief economist at the Kyser Center for Economic Research in Los Angeles.
It is likely evidence that the nation's housing market won't get hit with a double dip in prices and the recovery from the Great Recession has traction.
"It was clear in the data that there was not going to be another (price) leg down," said Craig Lazzara, senior director at S&P Dow Jones Indices. "And data on housing starts and permits seem to confirm that the housing market is in pretty good shape."
Prices are rising in response to declining sales of less expensive distressed properties and more sales of higher priced properties.
Case Schiller's report was one of three released on Tuesday that showed the market moving upward.
New home sales spiked in January by 16 percent nationally and foreclosures in Los Angeles and the Inland Empire declined.
It adds up to good news for insurance agent Julian Tu, owner of an Allstate office in Woodland Hills. His offer to buy a Warner Center town house for $264,000 in a short sale, made last November, was just accepted by the bank and is in escrow.
He'll already have some equity when the deal closes in about 30 days. A small unit in the same complex has a sale pending at $312,000, he said.
"I think mine is probably worth $320,000 now. I think it's great. I bought low and got a 3.8 percent for a nonowner occupied unit," Tu said.
Sales of new homes began picking up early last year and that momentum is continuing, said Shawn Evenhaim, president and founder of Canoga Park- based California Home Builders.
His company does both home and condominium projects. Waiting lists are now the norm.
"We sold out a project of 57 homes last year and we had waiting lists," he said. "We were able to sell them in nine months and did increase prices between phase one and four. They went up 10 percent."
His company currently has 551 units in the planning stages or under construction in the San Fernando Valley. And signs announcing a new project attract lots of attention.
"There is big demand. We have people calling before we go into construction," Evenhaim said.
That trend is evident in the resale market because inventory is at or near record low levels.
Tom Adams of Century 21 Adams & Barnes in Monrovia and Glendora said competition for homes has become fierce.
"The trend right now is if a home is priced anywhere close to being competitive you get so many offers you almost don't know what to do with them," he said. "There was a house in West Covina that was listed at $350,000 and we had 42 offers.
Confidence in the market seems to be growing, too.
Jim Mitchell, who owns BlackHorseRealty.biz Rancho Palos Verdes, said he has noticed a general sense of optimism about the housing market.
"I haven't talked to anybody in quite awhile who thinks otherwise," said Mitchell, who covers the South Bay. "As prices rise, it takes pressure off the people who are upside down and it enables people to sell where perhaps they couldn't before."
That's due in large part to foreclosure activity that is now well under record levels of the recession.
Irvine-based CoreLogic said the downward trend continued in December.
In the Los Angeles metro area during December, 1.63 percent of outstanding mortgages were in foreclosure, down from 2.54 percent a year earlier. The number of homeowners getting in trouble also dropped. The number of mortgages 90 plus days late fell to 5.21 percent from 7.23 percent in December 2011.
The Inland Empire recorded bigger drops.
The number of mortgages in foreclosure dropped to 2.14 percent in December from 3.62 percent a year earlier and the percentage of delinquent loans fell to 7 percent from 10.08 percent, the company said.
Staff Writers Kevin Smith and Muhammed El-Hasan contributed to this report.