California's New Home Sales Eke Out a Relative Gain in May

New home sales are in the tank in the not-so Golden State, but the existing home sector managed to squeeze in a bit of a gain in May. The California Association of Realtors reported that sales increased 1.2% compared to May a year ago. That's hardly stirring. But what is more impressive is that the median price statewide jumped 23.2%, to $324,430. And in even more welcome news, CAR says the inventory of homes on the market remained unchanged at 4.6 months. "Sales posted their third largest increase on record for May, due in part to first-time homebuyers who timed the open and close of escrow in order to capitalize on both the federal and state tax credits," said CAR president Steve Goddard. "May also marked the fifth month of double-digit gains in the median price, indicative of strong buyer demand relative to the supply of homes for sale." CAR's chief economist Leslie Appleton-Young's expectations are a bit lower, however. Noting that demand is lessening in the state, not increasing, she said existing home sales for the year in California will not be any greater than last year, if that.