Price in California Up for 2 Months in a Row
The California median home price posts year-to-year increases in March and April of 2012, as supply conditions tightened up across all price ranges.
Prices Beginning to Turn Heads
The statewide median price was at $308,050 in April of this year, up almost 5 percent over last April. It was the first time the median price was above the $300,000 mark in nearly a year and a half (since December 2010). Prior to March, we had seen 16 months straight of year-over-year declines in the median price. However, in March and April the California housing market bucked that trend as constrained inventory levels put upward pressure on prices across the board. The median price in April was the highest since September 2010 and was 26 percent above the cyclical bottom of $245,230 back in February 2009.
On a month-over-month basis, the median price was up 5.7 percent in April compared to March, which was markedly up from the long-run March to April change of 1.7 percent. That monthly increase came on the heels of a 9.3 percent monthly increase from February to March, all of which point to price gains much stronger than the typical seasonal change for this time of the year.
California’s Housing Market Faces Tight Inventory Conditions
Unsold Inventory is used to measure approximately how many months it will take to deplete the supply of homes on the market at the current sales pace. Currently, California’s housing market is running at 4.2 months of supply, as compared to the long run average inventory level of about 7 months.. For well over a year, tight supply conditions had been mainly limited to the distressed and entry-level markets, but the supply shortages have filtered into the mid to high-end of the market in recent months.
In addition, sales of existing single-family detached homes in California have been above the 500,000 mark for six months running and breaking in at above 555,000 units in April. With the current robust level of sales and the lack of inventory, the imbalance between demand and supply posed upward pressure on prices in March and April. All of the above makes for a very strong start to the home buying season in 2012. Call me today for more information or to list your home!