Tight Inventories Spark California Home Price Boom

A sudden surge in single family homernprices in California coupled with flat sales are both attributed by thernCalifornia Association of Realtors® (C.A.R.) to a scarcity of available homesrnfor sale, especially in the lower price ranges. rnThe median price is at a five year high after an unprecedented spike inrnMarch.  </p

Existing single-family homes sold at arnseasonally adjusted annual rate of 417,520 in March, up a scant 0.1 percentrnfrom a rate of 417,310 in February but down 4.9 percent from the March 2012rnrate of 439,260 units.  </p

Inventories fell to a 2.9 monthrnsupply on C.A.R.’s Unsold Inventory Index from 3.6 months in February and 4.2rnmonths in March 2012.  The indexrnindicates the number of months needed to sell the available homes at therncurrent rate of sales.  A six to sevenrnmonth supply is considered normal.</p

“While home sales were essentiallyrnflat from February, sales declined moderately from last year, as an extremernshortage of available homes continued to dictate the market,” said C.A.R.rnPresident Don Faught.  “Statewide inventory dropped 36 percent from lastrnMarch and was below 3 months for the second time in the past few months. rnSupply conditions are particularly tight in the lower-priced segment of thernmarket, as inventory for homes priced below $300k plunged more than 50 percentrnfrom the previous year.”</p

The median price of a single-familyrndetached home rose 13.7 percent from February to March, the highestrnmonth-to-month hike since C.A.R. began tracking the number in 1979 and was 28.2rnpercent higher than one year earlier. rnThe median price in February was $333,380, in March it was $378,960.  March was the 13^th month in whichrnthe annual median price increased and the ninth consecutive month the increasernwas in double digits.  However March’s surgernwas the first increase after two straight months when prices declined. </p

“No doubt the dearth of homernlistings is driving the upsurge in the median price, as is an increase in salesrnin the higher-priced segments,” said C.A.R. Vice President and Chief EconomistrnLeslie Appleton-Young.   “Sales of homes priced $500,000 and higherrnare up more than 34 percent from last year, and have been on a rising trendrnsince early 2012. Sales growth in the coastal regions – Marin, Orange, SanrnDiego, and San Luis Obispo, in particular – helped push the statewide medianrnprice up to the highest level in more than four years.”</p

The median days on the market for arnhome sold in March was 29.4 days, down from 34.2 days in February and 52.2 daysrnin March 2012. 

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