10:00pm | Home sales rose 1.2% in California in May compared from a year ago, while the median price of an existing home rose 23.2%, according to a California Association or Realtors report issued on Tuesday.

Long Beach’s median price rose 10% year-over-year in May to $303,000, up from $274,500, the report shows. The median for Los Angeles County rose 15% to $345,000 in May, the report shows. Statewide home resale activity rose 1.2% from May 2009, and sales in May rose 14.1% April, the report states.

“Home sales posted their third largest increase on record for May, due in part to first-time home buyers who timed the open and close of escrow in order to capitalize on both the federal and state tax credits,” C.A.R. President Steve Goddard said in a statement. “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. With a 4.6-month supply of homes for sale, unsold inventory continues to be well below the long-run average of seven months, and will continue to drive price appreciation over the next several months.”

Some say the report is what they expected, thanks to Congress not extending the tax credit. “It’s not surprising to me at all,” says Jeremy Colonna, with Colonna & Co. Realty. “The frenzied activity associated with the expiration of the tax credit in April was pretty spectacular. We are already seeing a marked difference in the marketplace. The numbers of buyers are noticeably down. I am interested to see what direction the market takes. Within the next couple of months, the Home Affordable Modification Program declines are going to be coming in. Most of them applied in January and had a six-month ‘trial period.’ I have already gotten a few short sale listings from those declines. It is also going to open up the market for lenders to foreclose again. Almost all of the REOs that you are seeing on the market right now are from Fannie and Freddy.”  

A National Association of Realtors report released on Tuesday shows existing home sales slipped a bit, but remained at a strong level. “Existing-home sales remained at elevated levels in May on buyer response to the tax credit, characterized by stabilizing home prices and historically low mortgage interest rates,” the report states. The report shows that gains in the West and South were offset by a decline in the Northeast; the Midwest was steady.

Existing home sales, which include single-family homes, townhomes, condos and co-ops, were 5.66 million units in May, down 2.2% from April’s 5.79 million units. However, May closings were 19.2% above the level in May 2009, the NAR report shows.

“We are witnessing the ongoing effects of the home buyer tax credit, which we’ll also see in June real estate closings,” NAR chief economist Lawrence Yun said in a statement. “However, approximately 180,000 home buyers who signed a contract in good faith to receive the tax credit may not be able to finalize by the end of June due to delays in the mortgage process, particularly for short sales. In addition, many potential sales are being delayed by an interruption in the National Flood Insurance Program. Florida and Louisiana, also impacted by the oil spill, have the highest percentage of homes that require flood insurance.”

May’s national median existing-home price for all housing types was $179,600, which was up 2.7% from a year ago.

Keller Williams agent Richard Daskam says he didn’t see the down-looking figures in the NAR report coming. “I am very surprised by the May National home sales figures. Our office had a record-breaking month with closings in May and the office is on track for an even better June closing month. The new buyer activity slowed the first couple of weeks in May, but is back to the pre-expiration of the $8,000 tax credit levels.” 

Daskam adds: “Personally, I’ve been on more listing and showings appointments in the past two weeks than I’ve been on in a few years. Looking at the local data for L.A. County, it doesn’t appear to mirror what I, or agents in my office, experienced in May, but as you know, real estate is a neighborhood by neighborhood micro-economy, not a state-wide or region-wide macro-economy.”

Daskam says that while he is seeing an increase in the number of homeowners listing their homes for sale as a short sale, many of those homeowners have been stating that the banks are refusing to modify their loans so they are forced to sell. “Unfortunately, I think this will be a trend that continues to increase this year as more and more of the modifications filter through the process and are denied,” he adds.

A Wall Street Journal blog with the headline Housing on the Rocks, Make it a Double, states that the “Commerce Department on Wednesday is expected to say new-home sales dropped 20% last month” and it also blames the expected drop on the halting of the government’s homebuyer tax credit. However, the blog notes that any signs of weakness should help put a stop to any build up in unsold housing inventory.

Dennis Berry, a Keller Williams agent who works with Daskam, says there’s no question, “the two tax credits did help spur the market. Our office had two record setting months, with June looking to be great also. The question is how well the market will do once the buyers who participated in these two credits have closed escrow. But the tax credits certainly helped the market and helped first-time homebuyers get into a home.”