According to PropertyRadar, California median homes prices have increased to an all new Six-Year high. But that’s not the end of it. Also, according to PropertyRadar, California has also seen the lowest year-to-date sales since 2007. So what’s causing all the confusion?
California single-family home and condominium sales gained 3.5 percent in May 2014 but were down 11.1 percent from May 2013. Year-to-date sales are the lowest since 2007. For the month, non-distressed property sales activity increased 5.0 percent while sales of distressed properties fell 0.7 percent.
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“What continues to surprise us month after month is that in the fifth year of a so-called recovery, year-to-date real estate sales are on track to be the lowest since 2007,” said Madeline Schnapp, Director of Economic Research for PropertyRadar. “Government policies that constrained supply coupled with high demand from all cash buyers pushed up real estate prices so quickly that in many parts of California the median income home buyer can no longer afford the median priced home.”
The May 2014 the median price of a California home reached its highest level since December 2007, up 10,000 dollars, or 2.7 percent, to 385,000 dollars from 375,000 dollars in April. On a year-ago basis, median home prices gained 10.0 percent. Driving the month-over-month price increase in May was the 4.5 percent increase in the sales volume of higher priced non-distressed properties, which accounted for nearly 81 percent of total sales. Note that when looking at only non-distressed sales, the median price rose only 2.3 percent over last year.
“The significant jump in median home prices this past month is being driven by the change in mix between the sales of distressed properties versus sales of non-distressed properties, rather than a big jump in actual home values” said Schnapp. “Just a few years ago, READ MORE…
Now with fewer institutional cash buyers in the market and fewer retail buyers due to tougher credit restriction it’s making it a more difficult market for sellers to sell their property for top dollar. The day of the multiple offers on every home is gone for now. Some market analyst believe that we are now seeing the changing signs of possibly turning the corner from a sellers market to a buyers market in the very near future.
California Median Home Prices are up…again. But for how long?