December home prices jump 19.6% in Southern California Southern California¿s housing market ended last year with sharp home-price gains and the highest sales for a December in three years. Southern California's housing market ended the year with sharp gains, rounding out the first solid year of sustained improvement after nearly five years of real estate malaise - and helping set up further improvement in 2013. The region's median home price registered a sizable 19.6% pop in December compared with the same month last year to hit $323,000, real estate firm DataQuick reported Tuesday. A record level of cash buyers flooded into the market and more move-up homes sold last month. While Southland housing is on the mend, the steep increase in the region's median price last month probably reflects a variety of factors, such as the mix of what sold in December, and the run-up may not continue at that brisk pace, experts said. The median is the point at which half the homes in the region sold for more and half for less. "There is no possible way that number can be sustained nor should anybody look at that as a long-term trend," said Stuart Gabriel, director of the Ziman Center for Real Estate at UCLA. We haven't shifted from bust back to bubble, and nobody should think we have, and nor likely will we. When compared with the prior month, the median was essentially flat, up only 0.6%. The median is heavily influenced by the types of homes selling, and some of last month's pricier sales may have been driven by fears of increased tax burdens on the wealthy, as Washington wrangled with the "fiscal cliff" negotiations. A rise in prices will mean more homeowners who had been underwater - owing more on their mortgages than their homes are worth, a condition also known as negative equity - can now put their properties on the market. That would help ease the region's inventory squeeze, which is another major factor driving up prices. The strong performance last month indicates that 2013 will continue to bring home price gains, analysts said. "Our forecast over the next 12 months is for equally strong appreciation," Zillow.com chief economist Stan Humphries said. Even though we have got a lot of homes still in negative equity in Southern California, the tight inventory is definitely creating some price appreciation. An estimated total of 20,274 new and previously owned homes and condominiums sold throughout the six-county region in December. The 2012 housing rebound came after foreclosures declined, housing inventory plummeted, mortgage interest rates hit record lows and demand from investors surged last year. In addition, the overhang of the last housing bust resulted in some unexpected benefits. For instance, the high number of underwater borrowers actually served as a boost to the market rather than being a drag, as people kept their homes off the market, decreasing inventory. "The lock-out phenomenon, combined with the rise in investors converting foreclosures into rentals, led to a lack of for-sale inventory," CoreLogic economist Sam Khater wrote in a research note. In California, buyers can anticipate a tight market in the near term. Supply from distressed sales, particularly from foreclosed homes, will remain limited as those homes are being quickly snapped up by investors while the number of troubled borrowers entering foreclosure continues to decline. The decline in foreclosures has been aided by an increase in short sales, as The Times recently reported, as well as other loan aid for borrowers. The increase in the median home price in Southern California reflects market dynamics as fewer sales are logged in cheaper neighborhoods and pricier places take off. Cash buyers and investors are playing a big part in snapping up home inventory.