California: Home Prices Continue Upward

The CALIFORNIA ASSOCIATION OF REALTORS® reports a 7.5 percent increase in statewide home sales during the year-over-year period ended in March.

Meanwhile, the median single-family price surged 15.7 percent to $495,400 in March from $428,060 during the same month of last year. CAR chief economist Leslie Appleton-Young attributes the ongoing housing frenzy to rapid population growth, with the state welcoming 3 million newcomers over the past five years.

Also in March, inventory of for-sale properties climbed to a supply of 2.7 months from 1.3 months. Foreclosures.com is concerned about a dramatic jump in mortgage defaults, pointing to research by PMI Mortgage Insurance Co. that puts six California markets among the top 10 regions with the highest risk of price declines over the next two years.

"We have a combination of very low affordability and rising interest rates as dual triggers for a price correction in overheated California markets," explains Alexis McGee, president of Foreclosures.com.