California housing prices soar, but sales slow

California housing prices soar, but sales slow - 2005-06-23 - East Bay Business Times

California housing prices soar, but sales slow
The median price of an existing home in California in May increased 12.8 percent to $522,590 but year-over-year sales decreased 2.1 percent compared, according to the California Association of Realtors on Thursday.

"The California housing market passed an important threshold in April, when the median price rose above $500,000 for the first time," said Jim Hamilton, president of the organization, in a statement. "This trend continued in May, with the median price approaching $525,000. At these prices, eroding affordability and concerns about rising interest rates are constraining sales."

Median home prices in the East Bay were up last month. Solano County saw the biggest increase in price, up 23.5 percent year-over-year to $420,000. Contra Costa County prices were up 22.2 percent since last May to $531,750 and Alameda County prices were up 20.5 percent to $575,000.

Closed escrow sales of existing, single-family detached homes in California totaled 618,920 in May at a seasonally adjusted and annualized rate, according to information collected by CAR from more than 90 local Realtor associations statewide. Statewide home resale activity decreased 2.1 percent from the sales pace recorded in May 2004.

The statewide sales figure represents what the total number of homes sold during 2005 would be if sales maintained the May pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

"Inventory levels, which have been at or above three months since July 2004, fell below three months beginning in March and have ranged between 2.6 and 2.8 months since that time," said CAR Vice President and Chief Economist Leslie Appleton-Young. "While not at the record low levels we experienced earlier last year, the tight inventory of homes for sale has impacted sales over the past couple of months."

In a separate report covering more localized statistics generated by CAR and DataQuick Information Systems, a La Jolla-based real estate information company, 97.5 percent or 396 of 406 cities and communities showed an increase in their respective median home prices from a year ago. DataQuick statistics are based on county records data rather than MLS information.