SAN DIEGO (AP) — California home prices surged to a six-year high in March amid lackluster sales at the start of the traditional buying season, a research firm said Wednesday.
The median sales price for new and existing houses and condominiums reached $376,000, up 5.9 percent from $355,000 the previous month and up 20.1 percent from $313,000 in March 2013, DataQuick said. It was the 25th straight month of annual increases, including the 16th straight month the year-over-year increase exceeded 20 percent. It was also the highest level since $383,000 in January 2008.
There were 32,923 homes sold, up 28.2 percent from February but down 12.8 percent from March 2013. Sales typically increase from February to March.
DataQuick said thin inventories contributed to the lowest March sales tally in six years. Sales in a six-county region of Southern California tumbled 14.3 percent from a year earlier, while sales in the nine-county San Francisco Bay Area slid 12.9 percent.
Selma Hepp, senior economist at the California Association of Realtors, pinned weaker sales on declining interest from investors and lack of affordability after huge price increases during the first half of last year sidelined potential buyers.
"There's sort of a waiting game," she said. "Prices were going up so fast, there was such a feeding frenzy until June or July. Then everything sort of stopped."
Hepp acknowledged that thin inventories are still an issue in the hottest markets, including the San Francisco Bay Area and many coastal regions. Those markets are still seeing bidding wars, with homes selling at least 20 percent over the listing price.
DataQuick analyst Andrew LePage said thin inventories are the top reason behind slowing sales, with lack of affordability, higher lending rates and waning investor interest contributing.
Absentee buyers — mostly investors and some second-home purchasers — accounted for 26.3 percent of homes bought in March, down from 28.4 percent the previous month and 31.3 percent in March 2013, according to DataQuick.
Inventories appear to have improved since the end of last year but are still less than what is considered a normal supply of five to seven months' worth of sales. According to the latest figures from the California Association of Realtors, there was a 4.7-month supply of unsold single-family homes in California in February, up from a 3.6-month supply a year earlier.
Analysts cautioned against reading too much into one month of sharp price increases. LePage said prices typically increase from February to March as more traditional buyers looking to trade homes make up a bigger mix of the market, replacing investors who tend to buy lower-priced homes and bring down the median.
In the San Francisco Bay Area, the median sales price was $579,000 in March, up 7.2 percent from $540,000 in February and up 23.2 percent from $470,000 in March 2013. It was the highest median price since December 2007, when it was $587,500.
In Southern California, the median price reached $400,000, up 4.4 percent from $383,000 in February and up 15.8 percent from $345,500 in March 2013. It was the highest level since $408,000 in February 2008.