The California housing market continues to gain momentum during the spring selling season, with new and existing property sales jumping 31.5% from February to March, according to San Diego-based DataQuick. Total sales overall rose from 28,719 to 37,764 units.
The strong activity should be taken with a grain of salt because last month's sales were still 13.5% below the average of 43,648 sales in the month of March.
The median price paid for a California home rose 8.3% from $289,000 in February to $313,000. However, it increased an even more dramatic 24.6% from $251,000 in March 2012. Last month marked the 13th consecutive month that the median price increased year-over-year.
Bay Area homes, on the other hand, fell below a year earlier for the second consecutive month in March, DataQuick reported.
However, the median sale price still rose 7.7% due to a jump in sales of $500,000-plus homes. The median price paid for a home in the nine-county Bay Area in March was $436,000, up 7.7% from $405,000 in February. This was also up a significant 21.8% from $358,000 in March 2012.
Total sales were up 34.4% from February’s 5,404 at 7,263 in March. However, sales were down 6.0% fro 7.723 in March 2012.
"Higher sales in the middle and top of the housing market reflect improved consumer confidence, ultra-low mortgage rates and the unleashing of more pent-up demand than many anticipated. There’s been a shift in psychology, where more people worry prices will rise and fewer fear a decline," said John Walsh, DataQuick president.
He added, "It’s drawn a lot of folks off the fence following a long stretch of sub-par sales, especially in the higher price ranges. In the more affordable markets, we’ve seen a big drop in foreclosures, which limits the supply of homes for sale. Then you have homeowners who still can't sell because they owe more than their homes are worth."
Walsh notes that as prices rise, the allure of a higher selling price will push more and more people to put their homes on the market. "A substantial jump in inventory would at least moderate home price growth," said Walsh.