California's once-battered housing market continued its recovery as statewide sales hit an eight-year high for July and prices remained firm, a real estate research firm said Thursday.
A total of 48,118 new and used homes and condos sold statewide during the month — the highest figure for a July since 2005 — and sales were up more than 17 percent from June and nearly 22 percent from a year ago, according to DataQuick.
Last month's sales were the highest for any month since August 2006, when 51,054 properties sold.
The median sales price for California was $363,000 in July, the San Diego-based company said. The median price has now increased year-over-year for 17 months in a row.
The percentage increase in median home price, however, has incrementally dropped month-over-month since May. The price jumped 4.9 percent in May, 3.5 percent in June, and 3.1 percent in July.
In Southern California, the median price was $385,000 in July, the same as it was the month before. In the San Francisco Bay area, it was $562,000, the highest figure since December 2007 and a slight jump from June.
The increase in sales indicates pent-up demand has found an increased supply of homes.
Rising prices mean fewer homeowners owe more than their home is worth, and they can now sell without losing money, said Stuart Gabriel, director of UCLA's Ziman Center for Real Estate. Higher prices are also drawing developers back into the market.
The combination will likely mean the rapidly increasing prices of the past year will begin to moderate, Gabriel said. Historically low interest rates are also rising slowly, which should contribute to a more normal market, he added.
"We're not saying that price increases are going to stop, they're just going to move more moderately," he said.
Meanwhile, foreclosure rates dropped to the lowest level since July 2007, with 8.4 percent of sales involving properties foreclosed on in the past year.
Short sales — transactions where the sale price fell short of what was owed on the property — made up 14.6 percent of homes resold last month. That was down nearly 16 percent from June and 26 percent from last year.