California Median Home Price Soars Past $400,000 Mark Highest Since December 2007

Real Property ReportHome Sales Up 9.0 Percent from March

California single-family home and condominium sales were up 9.0 percent in April 2015. April sales were 37,009 up from 33,946 in March. The increase in sales volume was predominantly due to the 9.2 percent gain in non-distressed property sales that accounted for 83.0 percent of total sales.

On a year-over-year basis, sales volumes were up 5.8percentfrom 34,995 in April2014to 37,009 in April 2015. Regionally, year-over-year sales were up 3.6 percent across the nine Bay Area counties and 11.0 percent in Southern California. Sales fell 3.4 percent in Central California.

“For the second consecutive month, California property sales were higher than a year earlier,”said Madeline Schnapp, Director of Economic Research for PropertyRadar.“Year-over-year growth in sales ground to a halt in September 2013. While it is still too early in the year to say the California real estate market is off to the races, healthy job growth in the past 18 months combined with pent-up seasonal demand certainly worked to drive sales higher during the past two months.”

The median price of a California home was$405,000in April, a gain of $12,000, or 3.1 percent from $393,000 in March. For the month, median prices rose in 19of California’s largest 26 counties. The counties that saw the biggest median price increases were Contra Costa (+5.15 percent), Santa Cruz (+6.72 percent), and San Francisco (+11.1 percent).

On a year-over-year basis, the median price of a California home was up 8.0 percent from 375,000 dollars in April 2014. Fourof California’s largest counties experienced double digit year-over-year price increases. Those counties were San Francisco (+23.6 percent), San Luis Obispo (+15.7 percent), San Mateo (+15.0 percent) and Santa Cruz (+14.6 percent).

“For the second consecutive month, the median price of a California home was significantly higher,” said Schnapp. “Despite high prices, buyers are still stepping up to the plate to purchase homes. With the Federal Reserve on tap to raise short-term interest rates as early as September, potential homebuyers may be worried that the current environment of near record low interest rates may not last.”
Cash sales were 21.1 percent of total sales in April, down from 25.2 percent a year earlier. “Despite the fact that nearly one-in-five sales are cash sales, the lack of lower priced inventory is sending an increasing number of cash buyers to the sidelines,” said Schnapp. Cash purchases will likely continue to decrease in the face of rapidly rising prices.”

Foreclosure Starts, Notices of Default (NODs), were up 2.5 percent from March but were down 7.3 percent in the past 12 months. Foreclosure Sales jumped 19.2 percent for the month and were up 27.7 percent from the February 2015 low.

“The rise in Foreclosure Sales may be a sign that financial institutions are pushing to liquidate their foreclosure inventory in order to take advantage of high prices,” said Schnapp.

In other California housing news:

  • Cash sales totaled 7,794 in April, down 3.8 percent from March and represented 21.1 percent of total sales. Cash sales as apercentage of total sales have been steadily declining since reaching a peak of 40.0 percent of total sales in August 2011. Since then, cash sales are down 45.0 percent. Cash sales were highest in Santa Cruz, Santa Barbara, Tulare, Riverside and Marin counties.
  •  Flip sales totaled 1,081 in April, down 2.2 percent for the month and 22.7 percent for the year. Flip sales are defined as properties that have been resold within six months. Flip sales comprised 3.3 percent of total sales in April, down 0.2 percent from 3.5 percent of sales in March. Flip sales peaked in July 2013 at 4.7 percent of total sales and have declined 44.4 percent since then.
  • April Institutional Investor LLC and LP purchases totaled 1,263, up 1.0 percent for the month but down 0.7 percent from April 2014. Over the longer term, institutional investor demand has retreated due to the lower return on investment and dwindling supply of distressed properties for sale. Institutional purchases were down 43.1 percent since peaking in December 2012. Similarly, Trustee Sale purchases by LLC and LPs were down 81.1 percent from their October 2012 peak.

“In the tug-of-war between high prices on the one side and pent-up demand and low interest rates on the other, the latter appears to have the edge,” said Schnapp. “We shouldn’t get too excited about the pop in March-April sales which are typically elevated, but if current trends continue we might start to hear the word “bubble” bandied about the water cooler. And speaking of water, with sales falling 3.4 percent in Central California, we are certainly keeping an eye out for any market affects related to the California drought.”

About PropertyRadar®
PropertyRadar provides software, data and analysis products for Real Estate professionals to find opportunities, lower risk and increase productivity. PropertyRadar has been serving its customers since 2007 (previous Brand name and older product known as ForeclosureRadar) and counts thousands of real estate investors, Realtors® and other real estate professionals among its subscribers. Bloomberg, 60 Minutes, Wall Street Journal, Los Angeles Times, San Francisco Chronicle, the Associated Press and many other leading media outlets have cited our data as the authoritative source for property-related reports, trends, graphs and insights. The company was launched in May 2007 by Sean O’Toole, who spent 15 years building software companies before entering the professional real estate market in 2002 where he successfully bought and sold more than 150 residential and commercial foreclosures.

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