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July home sales, prices post strong gains
Bay Area leads in state's strengthening housing market

by Jeb Bing

California home sales and prices both posted strong gains in July, with the sales pace showing positive year-over-year growth for the fourth straight month and the median price reaching a near-four-year high, the California Association of Realtors reported this week.

"It's hard to generalize the state of California's housing market because the markets are so diverse and are performing so differently," said CAR President LeFrancis Arnold.

"REO-dominated areas such as those in the Inland Empire and Central Valley are experiencing sales constraints due to an extreme shortage of available homes," Arnold explained. "On the other hand, a robust economy in the San Francisco Bay Area and a relatively larger inventory at higher price levels is helping to fuel sales and prices."

Closed escrow sales of existing, single-family detached homes reached a seasonally adjusted, annualized rate of 529,230 in July, up 2% from June's revised 518,680 rate, according to information collected by CAR from more than 90 local Realtor associations and MLSs statewide. July's sales pace was up 15.3% from July 2011's revised pace of 459,140 sales.

The statewide sales figure represents what would be the total number of homes sold during 2012 if sales maintained the July pace throughout the year and is adjusted to account for seasonal factors that typically influence home sales.

July marked the fifth consecutive month that California's median home price was up from both the previous month and year. The statewide median price of an existing, single-family detached home was $333,860 in July, up 4.2% from $320,540 in June and up 12.7% from a revised $296,160 in July 2011.

The July 2012 median price was the highest since August 2008, when the median price reached $352,730. July also marked the fourth straight month that the median price has posted above the $300,000 level.

"The strong performance in the median price over the past few months reflects a sales shift away from homes in the lower price ranges of the market due to stark inventory toward sales of homes priced above $500,000," said CAR Vice President and Chief Economist Leslie Appleton-Young.

"As an example, in July, sales of homes priced below $200,000 declined 9.4% from the previous year, and homes priced above $500,000 climbed 27.7% from a year ago," she said.

California's housing inventory was essentially flat in July, with the Unsold Inventory Index for existing, single-family detached homes at 3.4 months in July compared with 3.5 months in June. However, July's housing inventory index was down from a revised 5.6-month supply in July 2011. The index indicates the number of months needed to sell the supply of homes on the market at the current sales rate. The long-run average is a 6- to 7-month supply.

Interest rates continued to remain at historically low levels in July, with 30-year fixed-mortgage interest rates averaging 3.55%, down from 3.68% in June and 4.55% in July 2011, according to Freddie Mac. Adjustable-mortgage interest rates averaged 2.69% in July, down from 2.76% in June and down from 2.97% in June 2011.

The median number of days it took to sell a single-family home edged down from 43.4 days in June to 43.2 days in July. It took a median of 51.9 days for a home to sell in July 2011.