California Home Prices Soaring on Falling Supply, Pent-up Demand

The median price of homes in Californiarntopped $400,000 in April for the first time in five years.  The California Association of Realtors®rn(C.A.R.) said the increases are fueled by high demand and tight inventories ofrnavailable homes.</p

Completed existing home sales in thernstate were at a seasonally adjusted annual rate of 423,510 units in April, uprn1.3 percent from a revised 417,880 in March. rnSales were lower however than a year earlier, down 3.7 percent from thernannual rate of 439,770. </p

 “California’s housing market maintained itsrnmomentum in April, getting the spring home-buying season off to a good start,”rnsaid C.A.R. President Don Faught.  “Southern California regions such asrnLos Angeles, Orange County, and San Diego led the way in both month-to-month andrnyear-over-year sales increases, while sales in the Bay Area region as a wholernposted a healthy monthly gain but dipped slightly from last year.” </p

Statewide the median price of anrnexisting single-family detached home climbed 6.3 percent from the March medianrnof $378,960 to $402,760 and was up 28.9 percent from the April 2012 median ofrn$312,500.  April was the 14^th consecutivernmonth of annual price increases and the tenth month those gains were in doublerndigits.  On a regional basis the largestrngains were in the Bay area, up 7.8 percent for the month although prices wererndown 1.8 percent on an annual basis.  </p

There were some spectacular monthlyrngains in some counties – Mendocinornfor example was up over 57 percent in one month and Tuolumne 36.3 percent.  These are small counties where one or twornexpensive home sales can substantially skew data.   There were, however, no correspondingly largernprice declines. </p

“The upsurge in the median pricerncontinues to be driven by an increase in sales in the upper- price range, wherernlow inventory is less of an issue,” said C.A.R. Vice President and ChiefrnEconomist Leslie Appleton-Young.  “Over the past year, home sales in thern$500,000-and-higher market segment posted a year-over-year gain of 35 percentrnon average, which contributed to an increase in the statewide median price ofrnnearly 30 percent from the previous year.” </p

The inventory of homes for sale wasrnessentially unchanged from March, but was down markedly from a year ago.  Therernwas an inventory representing a 2.8 month supply in April compared to 2.9rnmonths in March and 4.2 months in April 2012. rnA six- to seven-month supply is considered normal.  Homes are moving quickly as well; the medianrnmarketing time in April was 27.9 days in April compared to 29.4 in March and 48rndays a year earlier.

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