Real estate prices in California are on track to surpass their peaks for several years, and there are signs that a rebound is underway, according to a new report.
The state is still on track for the strongest home prices in nearly a decade, according a report by the National Association of Realtors, which said in January that prices in the Golden State are now “more than $1 million per square foot.”
That compares with prices of $1.4 million per sq. ft. in December, according the report by NAR.
But the market is also “hotter and more volatile than ever,” according to the report, citing a spike in foreclosures in February that led to a sharp increase in mortgage defaults.
The report also noted that the California real estate sector is also showing signs of slowing.
“While some sectors are showing signs that they are returning to normalcy, others, including real estate and commercial real estate are beginning to show signs of a slowdown,” the report said.
Home prices in Southern California have risen by more than 6% in the past year, according NAR, but have dropped by more then 4% since mid-2014.
That compares to a 9% increase for San Francisco, 8% increase in Los Angeles and 9% rise for San Diego, according data from Zillow.
San Diego has seen its median price of $2.9 million hit its peak in October and its price has fallen 12% since.
The Los Angeles market, which is also on track, is showing signs it is slowing down, NAR said.
The National Association’s report was issued just ahead of the National Housing Association’s annual conference.
“California is seeing a strong recovery and the economy is rebounding, but housing remains a challenging market,” said Mark McDaniel, chief economist for NAR and a former member of the agency’s staff.
“Real estate has shown remarkable resilience and is on track in the midst of an upturn.”
The report comes after California’s attorney general’s office announced that the state will investigate a mortgage fraud scheme that involved buying homes from California residents with the intention of using them to defraud the state.
The case against the homeowners, who are believed to be residents of the Bay Area, is expected to be completed by the end of the year.