Southern California home prices in April rose at their slowest clip in over a year, as high prices hurt demand and sent sales down.
The median sales price in the six-county region climbed 1% from March to $404,000, research firm DataQuick said Tuesday. Home prices increased 13.2% from April 2013—the slowest annual gain since September 2012.
Sticker shock has taken some wind out of the recovery in the last year. Higher prices and mortgage rates have pushed many families and investors to the sidelines, causing sales to tumble.
A red-hot housing recovery cooled last summer and into the winter. And economists had looked to this year's spring home buying season for a better gauge of the market's health. But spring has kicked off with more of a whimper than a roar.
“There’s still pressure on home prices but it has moderated,” DataQuick analyst Andrew LePage said in a statement.
Sales have now fallen year-over-year for seven straight months. A total of 20,008 new and previously occupied condos and houses changed hands in April, 6.6% fewer than a year earlier. Sales fell over the year in all six counties.
The drop comes even as more homes are listed for sale, indicating softer demand. But the inventory rise has also eased price pressure and assuaged concerns of another housing bubble.
There are some signs, however, that a pickup could be around the corner. Sales increased 13.4% in April from March, far greater than normal And mortgage rates, once forecast to climb fast this year, haven't.
Rates are still up from a year ago, but the cost to borrow remains low historically. Lenders, on average, offered a 30-year fixed mortgage at 4.21% early last week, according to mortgage giant Freddie Mac.
DataQuick said investors continued their pull-back last month as higher prices make their bets less attractive. Absentee buyers--mostly investors--accounted for 26.1% of all homes sold last month. That's compared to 30.6% in April 2013.
All-cash deals comprised 26.7% of home sales, down from 34.4% a year earlier.