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The median price reaches $400,000 in the Southland. But would-be buyers of low- and mid-priced properties are increasingly priced out amid tight lending standards and stagnant paychecks.

By Tim Logan and Andrew Khouri
April 15, 2014, 7:50 p.m.

Southern California home prices are surging as the spring buying season heats up, with the median price in March hitting $400,000 for the first time in six years.

But a deeper look at the market reveals a recovery divided between the rich and everyone else.

The market for high-dollar homes is hopping, with sales on the rise and buyers launching bidding wars. But sales of low- to medium-priced homes have plummeted during the same period — with many potential buyers priced out.

“Housing affordability is really taking a bite out of the market,” said Leslie Appleton-Young, chief economist for the California Assn. of Realtors. “We haven’t seen this issue since 2007.”

The median price across the six-county region jumped 4.5% from $383,000 in February, according to San Diego-based DataQuick — the first significant increase since prices stalled last summer after a sharp run-up. But the number of homes sold fell sharply from 2013, down 14.3%, to the second-lowest total for a March in nearly two decades.

Those declines came even as sales of high-end homes increased. Sales of homes costing $800,000 or more grew 12%, while sales of homes costing less than $500,000 fell at twice that rate.

A number of factors have sapped demand, Appleton-Young said. Lending standards remain much tighter than during the housing bubble of the last decade. With wage growth stagnant, most middle-income families aren’t seeing more money in their paychecks. Add in issues such as rising student loan debt, and the mortgage payment becomes that much harder to afford.

“I think first-time buyers getting financing is going to become more of an issue,” she said.

Carey Chenoski, a real estate agent in Redlands, said she has seen less interest in homes for sale lately as first-time buyers struggle to afford the new higher prices. There are more homes on the market than last year — which is keeping further price growth in check — but they’re not selling.

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