JAN 15, 2013 11:58am ET

Fiscal Cliff Drives December California Home Sales

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California home sales in December increased 0.8% from November and 0.9% from December 2011 aided by consumers looking to act before the fiscal cliff, the state’s Realtors association said.

Real estate broker Redfin’s five hottest markets in December all were in California.

“A rush to complete sales of higher-priced homes by the end of the year to avoid an expected increase in capital gains due to the 'fiscal cliff' pushed up sales of homes priced $500,000 and above by nearly 42% from December 2011,” said 2013 CAR president Don Faught.

On an annualized basis, there were 522,510 units sold in December compared with 518,460 in November and 517,730 in December 2011.

“The positive fundamentals in the housing sector continued to attract potential homeowners and investors, which resulted in strong housing sales in the fourth quarter. Sales for 2012 rose 5.4%, reaching 525,120 for the year as a whole, slightly above our projection,” said CAR chief economist Leslie Appleton-Young. “With sales in the higher-end market remaining strong throughout the year, the price gain at the state level surpassed our expectations, increasing 11.6% from $286,040 in 2011 to a preliminary $319,340 in 2012.”

CAR commented that sales of lower-priced homes are being impacted by a lack of these properties on the market.

The median price in December was up 5% over November and 27% over December 2011. The year-over-year increase was due to the growth in higher-priced properties sold. CAR does not expect price increases to increase at a high pace in 2013.

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