California home prices in July reached their highest level since 2008, according to analytics firm DataQuick.

Home sales in the Golden State went for a median price of $281,000 in July, up 11.5% from one year ago and 2.6% from the previous month. July marked the fifth-straight month prices rose from the same time last year.

The peak topped out at $484,000 in early 2007.

More than 39,500 properties sold in July, up nearly 14% from one year ago.

"Financing with multiple mortgages is low, down payment sizes are stable, and cash and nonowner-occupied buying remains at a high level," DataQuick said.

Rising prices are good for borrowers trapped in negative equity and have been unable sell, refinance or obtain a principal reduction. Nearly one-third of all California homeowners are underwater, according to CoreLogic (CLGX).

Improving values are also good for many investors still holding exposure to the mortgage market in California. Fannie Mae, the largest mortgage investor in the country, holds 19% of its single-family book of business in California — the most of any state, according to its latest financial filing. In the second quarter ending in July, it reported its first consecutive profit since 2007.

Distressed sales — REO and short sales — made up 41% of the market, down from nearly 52% last year. Of these, short sales are taking a larger share of the market as well. Nearly one in five homes that resell in each month in California are short sales, according to DataQuick.

Roughly 22% of the properties that sold in July had been foreclosed on in the past 12 months, down from more than one-third of transactions one year ago. It's the lowest figure since November 2007 and down from a peak of 58% of all sales in early 2009.