Southern California home prices surged in July, as the already white-hot housing market saw heavy demand amid a persistent housing shortage.
The six-county area's median price climbed 7.7% from a year earlier to $501,000, according to a report released Tuesday from CoreLogic. That was the greatest jump in nearly 2½ years and put the median just $4,000 shy of its all-time high set in the summer of 2007.
In some areas of the Southland, including Los Angeles and Orange counties, the median had already surpassed bubble-era highs — and hasn't stopped climbing.
The median price in L.A. County in July was $575,000, up 8.1% from a year earlier. In Orange County, prices rose 7.9% to $690,000.
Across the region, sales dipped 2.3% from a year earlier, in part because of the shortage of listings.
"There's no inventory," said Cody Coffman, a Redfin real estate agent on the Westside of L.A.. "It's causing [selling] prices to go significantly over asking."
In Riverside County, the July median price surged 9% to $365,000. Prices rose 7% in San Bernardino County to $305,000; 6% in Ventura County to $554,500; and 8.6% in San Diego County to $537,750.
The rebound — now in its sixth year — has been driven by a steadily improving economy, rock-bottom mortgage rates and a severe shortage of homes listed for sale.
The high cost of housing is increasingly raising concerns that California is becoming inhospitable to those of modest means, particularly in the urban centers of the San Francisco Bay Area and Southern California.
As of 2015, about a third of California homeowners paid housing costs deemed unaffordable, according to an analysis from Harvard University's Joint Center for Housing Studies.
Renters have it worse, the analysis showed, with more than half paying over 30% of their income on housing costs, the threshold where costs are typically considered a burden.
Economists say the primary driver of the state's woes is a lack of home building relative to population and job growth, a dynamic that stretches back decades. To help solve the problem, they have advocated making it easier for developers to build more densely in California cities, something also key to lowering commute times.
For now, many young families are ditching coastal areas for far-flung communities in San Bernardino and Riverside counties, where developers are busy constructing homes and the demand for housing was reflected in the latest data.
The two counties were the only ones that saw an increase in sales from a year earlier and prices were up sharply as well, though they remain more than 15% below their bubble peaks. And that's without accounting for inflation.
State legislators are working on a package of bills aimed at alleviating the affordability crisis.
The bills, which face a Sept. 15 deadline for passage, would ease some development restrictions and offer funding for below-market homes, though housing groups and state officials note the proposals are a modest effort and hardly a cure.
According to the Case-Shiller index, which also was released Tuesday, prices in June in L.A. and Orange counties rose 5.61%, up from 5.55% in May. While the index lags, it is considered a more accurate gauge of the market's direction,
Staff writer Liam Dillon contributed to this report.
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12:30 p.m.: This article was updated with background on the state's housing crisis.