California home prices rose by the most in three decades as a shortage of houses on the market spurred competition among buyers, the California Association of Realtors said today.
The median price for an existing single-family home jumped to $417,350 in May, up 32 percent from a year earlier, the Los Angeles-based association said in a statement. It was the 15th consecutive annual increase and the largest since at least 1980, when the group started tracking the data.
Parts of California, including the San Francisco Bay area, have “extremely low housing inventory,” leading to the increase in prices, the Realtors association said. The median price in San Francisco surged 28 percent from a year earlier to $947,260, breaking a previous record set in May 2007.
“The Bay area, in particular, has been experiencing strong price appreciation, thanks to the region’s robust economic growth, extremely low housing inventory and an increasing demand from international buyers,” Don Faught, president of the group, said in the statement.
Sales in the state fell 3.6 percent from a year earlier to an annualized rate of 431,370 homes, the association said.
More homebuyers are putting down larger down payments and “opting for more stable loan products,” Leslie Appleton-Young, the group’s chief economist, said in the statement. “While home prices are increasing at levels above those observed in 2006-2007, the fundamentals of the housing market are much more solid than what we experienced a few years ago.”