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California home prices rise 19% during October

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POSTED November 14, 2012 9:43 p.m.



 

SAN DIEGO (AP) — California home prices posted an eighth straight annual increase in October, a research firm said Wednesday, the latest evidence that the state's housing market recovery is picking up steam amid tight inventories.

The median price for new and existing houses and condominiums reached $285,000, up 18.8 percent from $240,000 in October 2011 and hovering near a four-year high of $287,000 in September, DataQuick said

Foreclosed properties made up a smaller part of the sales mix, lifting the median price because they tend to sell at steep discounts. DataQuick said homes that were foreclosed upon in the previous year accounted for 17.4 percent of existing home sales last month, down from 34 percent a year earlier and down from 58.5 percent in February 2009.

There were 39,254 homes sold in the state last month, up 15.2 percent from 34,087 sales the same period last year, DataQuick said.

Gains were felt across the state but some of the sharpest sales increases were in more expensive, coastal regions. Orange County, with a median sales price of $455,000, saw sales jump 41 percent from last year. San Francisco, with a median price of $794,500, posted a 27 percent sales increase.

In the nine-county San Francisco Bay area, the median price was $416,000, up 18.9 percent from $350,000 last year. There were 7,795 homes sold, up 13.8 percent from 6,850 last year.

Mirroring trends in Southern California, the Bay area showed its strongest growth in mid- to high-priced homes. Bay area sales below $300,000 fell 15.2 percent from last year while transactions between $400,000 and $800,000 jumped 25.7 percent and sales above $800,000 soared 47.1 percent.

The gains come in an environment of low borrowing rates and a limited supply of homes for sale.

The California Association of Realtors' index of unsold inventory stood at a 3.7 months in September — the latest period available — down from 5.3 months a year earlier. The figure represents how long it would take to sell all existing single-family homes in California at the current sales clip. Supply in a normal market is considered to be six to seven months.

Paula Cosenza of Cosenza Realty Consultants in Laguna Niguel said inventory in southern Orange County is the lowest she has seen in years. Many buyers are willing to pay all cash, getting an upper hand over well-qualified borrowers.

"From the seller's perspective, I've got a cash offer, I don't have to worry about the loan going through, and it's faster," she said.

Jim Klinge, a broker in north San Diego County, said one of his customers bid on 14 properties before finding a $400,000 home in Vista last month.

"You can't say there's no inventory, it's just that it's getting bought up right away," he said.

Many homeowners are still owe more than their property is worth, making them reluctant to put their homes up for sale until prices climb. According to research firm CoreLogic, several California markets exceed national figures for homeowners with "negative equity."

In Southern California's Inland Empire, 41.9 percent of home loans were in negative equity in September, compared to a national average of 22.5 percent, CoreLogic said earlier this month. In the Sacramento area, 37.9 percent of loans were in negative equity.

 

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