California housing market booming
By Michael Liedtke
Associated Press
SAN FRANCISCO — Unfazed by the state's sputtering economy, California home prices accelerated to record highs in April as buyers continued to take advantage of the lowest mortgage rates in a generation.
Although homes are less affordable than a year ago, they are still within the price range of more prospective buyers than in other boom periods when interest rates were much higher, analysts said.
Propelled by the market's biggest sales spurt in 19 months, a mid-priced home in the San Francisco Bay area sold for $402,000 in April — topping the previous peak of $386,000 in March 2001, according to monthly statistics compiled by real estate research firm DataQuick Information Systems.
The numbers told a similar story in Southern California, where April sales translated into the second-busiest month since DataQuick began tracking in 1988.
Southern California prices also climbed to a new high, hitting a mid-range of $258,000 — up $1,000 from the high established in the previous month, DataQuick said. Southern California home prices have climbed 16 percent over the past year.
No matter how it's measured, the housing market has overcome the economic malaise that has bumped people onto the unemployment line during the past year and left the California government grappling with its biggest budget deficit since World War II.
But while a continuing rise in home prices would be good news for owners, more increases threaten to make the market less affordable to prospective buyers where demand already outstrips supply.
"At some point," said Leslie Appleton-Young, chief economist for the California Association of Realtors, "the lack of affordability in the market becomes an Achilles' heel that could cripple the economy.
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