California median home prices posted their first year-over-year increase in 16 months, although home sales last month dipped from their February pace.

The statewide median price of an existing, single-family detached home rose 9.2% to $291,080 in March from February’s $266,660. It increased a more modest 1.6% from a revised $286,550 in March 2011. 

Despite positive home price data, the housing recovery remains tepid.

Closed sales of existing, single-family homes totaled a seasonally adjusted annualized rate of 505,360 units in March, down 4.5% month-over-month and down 2.3% from the year-ago period.

CAR members noted tight inventory (4.1 months) throughout the state and particularly robust sales in the San Francisco Bay area, which helped fuel the price increase.

The California Association of Realtors argues that the low inventory demonstrates limited need for bulk REO sales. The group has previously opposed the Federal Housing Finance Agency plans for a pilot REO-to-rental project.

The pilot program calls for the sale of about 2,500 REOs to investors who would convert them to rentals for a period of time. More than 600 Fannie Mae-owned foreclosed homes in the pilot are located in Los Angeles and Riverside counties, CAR notes.

San Diego-based DataQuick noted in a separate report that both sales and prices rose in Southern California during the month of March over February figures. Still, prices were down slightly from a year ago, in Southern California, witness to the weak nature of the housing recovery.

A total of 19,953 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month, according to DataQuick. That was up 28.1% from 15,573 in February, and up 2.8% from 19,412 in March 2011.

Sales rose the most in the $200,000 to $400,000 price range, increasing 4.2%. Sales above $800,000, meanwhile, dipped 5.6%.

DataQuick President John Walsh said the modest gain in sales from March 2011 suggests a recovery stuck in low gear while the large February gain was a mostly seasonal phenomenon.

“This remains a very gradual — not to mention fragile – recovery," he said.