A lack of inventory remains an issue, as the housing supply fell more than 30 percent from last year. Inventory levels are at the lowest levels we’ve seen in seven years, and we are starting to see the supply shortage conditions having a negative impact on sales in the Central Valley and the Inland Empire, where REO (real estate owned) properties are in short supply.
For-sale inventory fell to a supply of 3.2 months at the current sales pace in August, down from a revised 3.5 months in July and a revised 5.2 months in August 2011. A supply of six months is considered to be a “normal” market where buyer and seller demand is roughly equal. Last month, only homes selling for more than $1 million were in normal territory with a supply of 6.1 months. Homes under $300,000 had the lowest inventory, with a supply of 2.8 months.
The median price of an existing single-family home rose for the sixth straight month in August, up 15.5 percent year over year to $343,820. That’s a 3 percent increase from July, the largest annual price jump in more than two years, and the highest median since August 2008.
“The median price is gaining in part because of a shift in the mix of what is selling,” said CAR Chief Economist Leslie Appleton-Young in a statement. “The increasing share of sales in higher-priced coastal markets at the expense of the inventory-scare distressed markets has been the primary factor in fueling the statewide median price.”
Higher-priced markets with a “robust economy” are experiencing strong demand and posting double-digit year-over-year price increases, but sales were stagnant or declined in lower-priced markets that rely more on distressed properties, Appleton-Young said.
Sales of homes under $200,000 saw a 13.6 percent year-over-year decrease in August, while sales in every other price range rose. Homes above $500,000 saw the biggest jump, nearly 30 percent, which primarily includes Los Angeles homes for sale as well as the San Francisco housing market.