Although the median price of a California home in June reached the highest level since December 2007, up $5,000, or 1.3%, to $390,000, the pace of increase is finally starting to simmer down, according to the Real Property Report from PropertyRadar.
The median price of non-distressed homes only grew 0.8% from 2013, indicating the 10% overall gain in median home prices was primarily due to a shift from distressed to non-distressed sales.
Sales volume of higher priced non-distressed properties increased 2.8% in June, which accounted for nearly 83% of total sales, while sales of distressed properties fell 9.1%.
“The nearly uninterrupted double-digit monthly increases in median home prices from August 2012 through March 2014 has slowed considerably,” said Madeline Schnapp, director of economic research for PropertyRadar. “That’s good news for buyers who were finding themselves rapidly priced out of the market.”
The deceleration in price increases is even more apparent at the county level, where double-digit price increases occurred in 16 of the 26 largest California counties in March but fell to eight in June.
California single-family home and condominium sales escalated 0.6% in June but were down 12.6% from June 2013. Year-to-date sales for the first six months of the year are the lowest since 2008.
“June marks the sixth consecutive month that sales have been lower on a year-over-year basis. The lack of distressed property inventory and rapid increase in median prices has definitely taken a toll on demand,” Schnapp said.
“Affordability and tight credit have slowed or stopped price increases despite lack of inventory. Going forward, we expect low sales volumes and flat prices until increased supply forces prices lower or looser credit makes current prices more affordable,” she added.
Meanwhile, according to the recent VeroFORECAST from Veros Real Estate Solutions, the nation’s home prices are still on the rise, but the rate of growth is slowing considerably. Home prices are expected to rise 2.5% in the nation’s 100 top metro areas between now and June 1, 2015.