California home sales slumped in June

 

Associated Press

California home sales slumped last month from a year earlier as buyers faced tight supply and prices continued to rise, a real estate research firm said Wednesday.

There were 39,254 homes and condominiums sold in June, DataQuick said. That was up 4 percent from May — a typical seasonal rise — but it was nearly 20 percent below the average for all Junes since 1988.

In fact, DataQuick said sales haven't topped the average for any particular month in more than eight years.

The median price paid for a home in June was $393,000 — up 1.8 percent from May and 11.6 percent from June 2013.

It was the highest median price for any month since December 2007 although well below the peak of $484,000 set in spring 2007, DataQuick said.

By comparison, the median price dipped to $221,000 in April 2009 after the housing crash.

"Prices have increased a lot over the past couple of years as the economy has improved ... and yes, that's pricing people out" because their incomes haven't kept pace, DataQuick analyst Andrew LePage said.

The number of homes for sale is low compared with previous years, despite being greater than a year ago, LePage said. New home construction has flagged and fewer lower-priced, distressed properties are on the market, he said.

Meanwhile, prices are rising and would-be buyers who couldn't manage a regular loan have less chance of obtaining large, riskier loans.

"Lending guidelines are still fairly conservative," LePage said. "Most people still can't stretch (their financing) nearly as much as they could have during the last housing boom."

While home prices may continue to rise in the near future, the pace of the increase may slow, LePage said.

"I think affordability constraints will serve as gravity for home prices," he said.

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