California’s hyperactive housing market appeared headed from statewide recovery to all-out exuberance last month as prices on closed sales climbed at a record pace.
The state's median home price shot up a record 28.5% in June from a year earlier, real estate research firm DataQuick said Thursday.
That jaw-dropping increase is due to a number of factors, including fewer cheaper homes being sold in hot markets such as Southern California and the San Francisco Bay Area and very limited inventory across the state. Demand has apparently surged after home prices bottomed out last year.
In just one year’s time the median price rose from $274,000 to $352,000, according to research firm DataQuick. The median does not strictly measure home values — rather, it is the point at which half the homes in the state sold for more and half for less. It is highly dependent on the types of home selling.
So if you are a homeowner, that means your house did not necessarily rise close to 30% in value in one year. However, if you are a home shopper, then it is true that there are fewer cheaper options being snapped up than there were a year ago.
DataQuick’s figures also showed an estimated 41,027 homes sold across the state in June. That was a 6.9% decline from May and a 3.5% drop from June 2012. Given the dramatic rise in prices, the drop in sales means that demand is outstripping supply.
Foreclosures made up a meager 10% of the resale market, the lowest level since August 2007, when credit markets were seizing up and the subprime mortgage market was melting down, ushering in the big bust. At the height of the mess in February 2009, foreclosures made up 58.8% of the market.