California single-family home and condominium sales fell 1.4 percent in February from January, and declined 16.1 percent from February, 2013. According to the Real Property Report from PropertyRadar, last month marked the lowest sales for the month of February since 2008.
"Rapid price increases and rising interest rates in concert with sluggish income and employment growth have slowed demand," said Madeline Schnapp, director of Economic Research for PropertyRadar. "Tougher borrowing standards, elevated prices, increasing borrowing costs and historically low inventory continue to exert a drag on market activity."
Although home sales volume decreased in California, the median price for a home in February increased by $5,000, or 1.4 percent, to $350,000. Median home prices have jumped 21.1 percent year-over-year.
Schnapp noted, "The uptick in median home prices in February means little as seasonal factors continue to impact both sales and prices. Given the lackluster sales volume, however, median prices are unlikely to see the rapid gains that characterized the first half of 2013."
Negative equity is also on the decline—a positive note for Californians.
The number of California homeowners with more than 10 percent equity in their homes increased by 2.3 percent—nearly 120,000 homeowners in February.
"But, it is important to keep in mind that 1.2 million California homeowners, or 13.9 percent, remain underwater and will continue to create significant headwinds for the California housing market recovery," Schnapp cautioned.
She continued, "In sum, the California housing market continues to improve, just more slowly than most analysts expected, given that we are in the fifth year of an economic recovery."