California Home Prices Benefit from Short Inventory, Sales Suffer

California house prices have now risenrnon an annual basis for a full year according to the California Association ofrnRealtors® (C.A.R.).  The median price ofrnan existing single family home sold for $333,800 in February, down 1 percentrnfrom the January median of $337,360 but an increase of 24.2 percent fromrnFebruary 2012.   In addition to marking a full year of annual pricernincreases, February was the eighth consecutive month with annual increases inrndouble digits.</p

Sales of existing single-family detachedrnhomes in February were at a seasonally adjusted annual rate of 416,610 units inrnFebruary, down 0.9 percent from January and 5.9 percent from 442.660 sales inrnFebruary 2012.</p

C.A.R.rnsaid sales are being affected by a lack of inventory.  ThernFebruary Unsold Inventory Index for existing, single-family detached homes wasrn3.6 months in February, up from 3.5 months in January, but down from 5.4 monthsrnin February 2012.  The index indicates the number of months needed to sellrnthe supply of homes on the market at the current sales rate.  A six- tornseven-month supply is considered normal.</p

Homes sold more quickly in February,rnwith the median number of days it took to sell a single-family home decreasingrnto 34.2 days in February, down from 36.6 days in January and down from arnrevised 57.4 days for the same period a year ago.</p

“The demand for homes remains solid,rnbut a shortage of homes for sale, especially in the lower-priced segments, isrnnegatively impacting housing sales,” said C.A.R. President Don Faught. rn”Sales of homes priced above $500,000 continue to be strong, posting nearly 31rnpercent higher than a year ago, while homes priced below $300,000 were down 27rnpercent from last February due to fewer available homes for sale.”</p

 “With housing inventory dropping nearly 39rnpercent from a year ago, supply constraints continued to propel strong gains inrnthe median price, but also intensified market competition,” said C.A.R. VicernPresident and Chief Economist Leslie Appleton-Young.  “With an imbalancernbetween supply and demand, home buyers have been fiercely competing with eachrnother.  More than half of home sales are receiving multiple offers, withrnhomes getting an average of four to five offers, and some even more.”

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