The interest in expensive homes in California is contributing to the rise in house prices to record levels in the state, , even as sales of cheaper homes declined last month. Home sales dropped by more than 1 percent last month and were down 6 percent compared to the same time a year ago, to about 275,550 houses. CAR said high mortgage rates and elevated prices were part of the explanation behind the slow pace of sales.
The median price of a house soared around 9 percent, to about $908,000, a record for the state. The jump in prices is being driven by stronger sales of homes that cost above $1 million, according to CAR. "Stronger sales of higher-priced properties continued to contribute to solid median price growth, especially since million-dollar home sales in California have been rising more rapidly than their more affordable counterparts in the state," Realtors said.
While overall sales declined, the expensive segment of the market saw an improvement. Homes priced at $1 million or more saw an increase in purchases of 15.5 percent in May on a yearly basis.
On the flip side, houses valued at $500,000 or below saw sales plunge by more than 12 percent last month compared to the same time a year ago. The sales of pricier homes now make up close to 37 percent of all home sales in California in what is the largest share in five years, according to CAR. "A persistent shortage of homes for sale, particularly in the more affordable market segments, continued to push up California's .
