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Southern California homes sold last month at the fastest clip for a July in three years and the fastest pace for any month since December 2006. The median price paid rose slightly from June – marking the third consecutive month-to-month gain – as sales in pricier coastal areas continued to rise and sales of lower-cost foreclosures waned, a real estate information service reported.

A total of 24,104 new and resale houses and condos closed escrow in San Diego, Orange, Los Angeles, Ventura, Riverside and San Bernardino counties last month. That was up 3.6 percent from 23,262 in June and up 18.6 percent from 20,329 a year ago, according to San Diego-based MDA DataQuick.

July’s sales total was 8.7 percent lower than the average number sold in July – 26,410 – since 1988, when DataQuick’s statistics begin. July home sales have ranged from a low of 16,225 in July 1995 to a peak of 38,996 in 2003. (…)

The government has recently renewed the wildly successful “Cash for Clunkers” program, doubling the initial earmark designed to stimulate sales of fuel-efficient automobiles in exchange for ones that are much less efficient.

We are wondering if a similar action might come in November when the “First Time Homebuyer” program is scheduled to come to an end.

Our experience of late is that first-time home buyers are out in greater numbers than in recent memory. We attribute this to several factors: 1) Lower priced homes; 2) Low interest rates (these two combined making up the favorable “affordability index”); FHA loans that allow for as little as 3.5 percent down payment, and; 4) The (up to) $8,000 tax credit for qualified buyers who have not owned a home in the past three years. (…)

The biggest news recently is that the number of distressed properties on the market has declined significantly and continues to be a smaller percent of the total inventory. As of the end of July, distressed properties (short sales and bank-owned properties (also known as REOs)) represent just 29 percent -2,616 homes out of a total of about 9,000 – of active inventory. That is down 56% from its peak last summer. REOs show the biggest decline with just 331 listings in all Orange County. There is also a huge demand for these properties, which makes the competition to get one intense. (…)