California Home Prices Soaring on Falling Supply, Pent-up Demand
The median price of homes in California topped $400,000 in April for the first time in five years. The California Association of Realtors® (C.A.R.) said the increases are fueled by high demand and tight inventories of available homes.
Completed existing home sales in the state were at a seasonally adjusted annual rate of 423,510 units in April, up 1.3 percent from a revised 417,880 in March. Sales were lower however than a year earlier, down 3.7 percent from the annual rate of 439,770.
"California's housing market maintained its momentum in April, getting the spring home-buying season off to a good start," said C.A.R. President Don Faught. "Southern California regions such as Los Angeles, Orange County, and San Diego led the way in both month-to-month and year-over-year sales increases, while sales in the Bay Area region as a whole posted a healthy monthly gain but dipped slightly from last year."
Statewide the median price of an existing single-family detached home climbed 6.3 percent from the March median of $378,960 to $402,760 and was up 28.9 percent from the April 2012 median of $312,500. April was the 14th consecutive month of annual price increases and the tenth month those gains were in double digits. On a regional basis the largest gains were in the Bay area, up 7.8 percent for the month although prices were down 1.8 percent on an annual basis.
There were some spectacular monthly gains in some counties - Mendocino for example was up over 57 percent in one month and Tuolumne 36.3 percent. These are small counties where one or two expensive home sales can substantially skew data. There were, however, no correspondingly large price declines.
"The upsurge in the median price continues to be driven by an increase in sales in the upper- price range, where low inventory is less of an issue," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. "Over the past year, home sales in the $500,000-and-higher market segment posted a year-over-year gain of 35 percent on average, which contributed to an increase in the statewide median price of nearly 30 percent from the previous year."
The inventory of homes for sale was essentially unchanged from March, but was down markedly from a year ago. There was an inventory representing a 2.8 month supply in April compared to 2.9 months in March and 4.2 months in April 2012. A six- to seven-month supply is considered normal. Homes are moving quickly as well; the median marketing time in April was 27.9 days in April compared to 29.4 in March and 48 days a year earlier.