California home sales surge in June on strong economy

Staff Writer
Columbus CEO

SAN DIEGO (AP) — California home sales surged in June on a strong economy and low interest rates as prices reached seven-year highs, a research firm reported Friday.

The median sales price for new and existing houses and condominiums hit $417,000, up 3 percent from $405,000 in May and up 6.9 percent from $390,000 during the same period last year, according to CoreLogic Inc.

It was the highest median price posted since October 2007.

Sales rose from a year earlier for the fourth straight month to an estimated 46,095 homes despite unusually tight supplies. It marked an increase of 10.8 percent from 41,612 sales in May and 16.8 percent from 39,460 sales a year earlier.

"The economy is clearly in a much better place than it was a year ago," said Stuart Gabriel, director of the UCLA Ziman Center for Real Estate. "The (economic) fundamentals clearly support what we're seeing in the housing market."

Buyers may also be trying to get ahead of an anticipated increase in interest rates by the Federal Reserve, Gabriel said.

The San Francisco Bay Area notched its highest sales tally since August 2006, while the median sales price neared its peak during the boom in the previous decade.

The median price in the city of San Francisco topped $1.1 million.

The median price in the nine-county Bay Area hit $660,000, up 6.8 percent from $618,000 a year earlier, CoreLogic said. It peaked during the last cycle at $665,000 in the summer of 2007.

Sales were particularly strong in suburbs, climbing 27 percent from a year earlier in Contra Costa County and 30 percent in Solano County.

"Those areas are starting to attract more commuters as prices reach unaffordable levels," said Jeffrey Michael, director of the Center for Business Policy and Research at University of the Pacific in Stockton. "The economy is strong and the jobs are there."

Mike Fracisco, a Bay Area broker in Alameda and Contra Costa counties, said his buyers are increasingly high-paid employees at San Francisco technology companies.

"It's surprising to see the income levels of these homeowners coming in, much higher than what we've seen during the last seven years," said Fracisco, who had multiple offers within days on each of three homes he listed the first week of July between $500,000 and $800,000.

Gains extended throughout the state.

Southern California also posted its highest monthly sales since August 2006, according to CoreLogic. The median sales price in the six-county region was $442,000, up 5.7 percent from $418,000 a year earlier.