Further evidence of a turnaround in the California real estate market was reported Thursday by the state Realtor association, which said existing-home sales in May increased 35.2% over last May to an annualized pace of 556,590. Moreover, the median price of $267,570, though down 30.4% from last May, was up 4.2% from April.

"The statewide median price rose for the third consecutive month in May, posting the largest monthly increase on record for the month of May, according to statistics dating back to 1979," said Leslie Appleton-Young, chief economist for the California Association of Realtors. "Nearly all regions in the state reported positive month-to-month changes in median price."

Moreover, the Realtors are starting to see the return of a welcome problem--scarce inventory. C.A.R.'s Unsold Inventory Index for existing, single-family detached homes in May 2009 was 4.2 months, compared with 8.7 months (revised) for the same period a year ago. "Inventory levels are well below the long-run average of seven months, which may account for the increase in median price," added Appleton-Young. "Although the state continues to operate in a bifurcated market, improved access to lending and price adjustments have led to increased activity in the high-end segment."

In a separate report based on data from C.A.R. and DataQuick Information Systems, nine of the 353 cities and communities even reported an increase in median home prices from a year ago.