Home Prices Rise 19.4% in State

Whether state or national, Monday’s news about homes in December was the same: up.

For the state, home prices increased 19.4% last month from a year earlier amid a tight housing market and lower interest rates, according to figures released Monday by the California Assn. of Realtors.

Meanwhile, across the U.S., sales of previously owned homes jumped to a 6.47 million annual pace in December, concluding a year in which prices had their biggest rise in more than two decades, according to the National Assn. of Realtors.

The California association said the median price for an existing, single-family detached home in the state was a record $404,520, the second time last year that prices were above $400,000. The median price in December 2002 was $338,840. The median is the point at which half the homes sell for more and half sell for less.

“Nearly every region in the state posted double-digit increases in the median price, with the Riverside-San Bernardino region reporting a gain of more than 32%,” said Leslie Appleton-Young, chief economist for the California association.

Higher prices were due to a low inventory of homes for sale and low interest rates, the group said. The average interest rate for a 30-year fixed mortgage was 5.88% last month, down from 6.05% in December 2002, according to Freddie Mac, the second-largest buyer of U.S. mortgages.

The number of homes sold in California last month, 637,080, was up 11% from a year earlier.

Statewide, the communities with the greatest median home price increases were Calabasas, with a 49.8% increase; Malibu, 44.8%; Sanger, near Fresno, 44.2%; and Desert Hot Springs, north of Palm Springs, 43.9%.

On the national front, existing home sales rose 6.9% from a revised 6.05-million rate in November, the national association said. For all of 2003, sales reached 6.1 million, shattering the previous high of 5.57 million a year earlier. The median selling price increased 7.5%, the largest rise since 1980.

The national Realtors group predicts sales in 2004 will be the second-highest ever, fueled by a stronger economy. Federal Reserve policymakers are expected to hold their target interest rate steady Wednesday to help nurture the expansion amid low inflation. Mortgage rates last month held close to a 45-year low reached in June and employment grew for a fifth month.

Economists surveyed by Bloomberg News had expected home resales would rise 0.7% to a 6.1 million annual pace after November’s previously reported 6.06 million rate.

The median price of a home nationwide rose 1.9% to $173,200 last month from $169,900 in November. The national association projects the median price will rise 4.6% this year. Sales were higher in all four regions. They rose 9.4% in the Midwest, 7.9% in the West, 5.3% in the South and 2.9% in the Northeast.