Record year seen for Calif. home sales, prices Tue Oct 25, 8:38 PM ET
California's housing market is positioned for a record year after the median home price in the state in September jumped 17.3 percent and the month's home sales rose 3.9 percent from a year earlier, according to a report released on Tuesday.
The median price of an existing, single-family detached home in California, which has had one of the hottest housing markets in the nation in recent years, rose 17.3 percent to $543,980 in September from a year earlier, and fell 4.4 percent from August in a typical seasonal pattern, according to the report by the California Association of Realtors.
Closed escrow sales of existing, single-family detached homes in California totaled 650,780 in September at a seasonally adjusted annualized rate, up 3.9 percent from a year earlier and 2.9 from August.
The price and sales data point to a record year for California's housing market, according to Leslie Appleton-Young, chief economist for the realtors' group.
"Year-to-date sales are on track with our expectation that the market in 2005 will set new records for both statewide sales and median price," Appleton-Young said.
However, California's overheated housing market is expected to cool as households stretch to buy homes, a trend that will be reflected in home price appreciation.
"Entry level and mid-range homes are showing more strength in year-over-year price gains compared with the high end of the market," Appleton-Young said. "But all tiers of the market are appreciating more slowly than they did a year ago."
"First-time home buyers are being pushed out from the coast," Appleton-Young added, noting high home prices in coastal markets are forcing many home buyers inland, where homes are less expensive. "The San Diego median home price is $612,030, compared with the High Desert's median of $312,410, so it's a pretty significant difference."
The realtors' group has forecast California's median home price will rise by 10 percent next year, compared with a projected increase of 16 percent this year, and that home-price appreciation next year in the state will be stronger in inland areas than in coastal areas.
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