The number of home sales in San Diego County increased sharply in March following the typical trend of increased homes sales at the beginning of spring. Almost 20,000 new and existing homes and condos were sold in Southern California, which is almost a 3% increase year-over-year. This makes it the third year in a row and the seventh month out of eight where there was an increase in homes sales.

Home prices also reached a six-month high thanks to a large number of home sales that were on the higher end of the price index. Sales for homes priced at greater than $500,000 increased by almost 40% from February. There was only a 28% increase in total sales from last month, showing how much of an impact the high-end homes had on the market. The average price for a home sold in March was $280,000, a slight decrease year-over-year and the highest average that’s been seen since last fall.

Despite increasing home sales and prices, the market is still only slowly recovering and is still quite fragile. Although we’re still in the first part of 2012, a lot could change and the recovery for the upcoming months is expected to remain very gradual. Half of the properties sold last month were either on foreclosed properties or short sales (when the seller owes more than what the home is sold for). Last year, foreclosures comprised 31% of all homes sales and short sales comprised almost 19% of all sales.

Investment buyers and those looking for a second home made up 28% of all sales and helped to boost the recovery effort. In February they comprised almost 30% of all sales, but a year ago that number was only at 26%. In other areas surrounding San Diego, prices and home sales flip-flopped. Some areas saw in increase in home sales but a decrease in home prices, while other areas saw an increase in home prices, but a decrease in sales.