More than 1,500 existing homes sold last month, according to DataQuick. Compared to January of last year, that's a 5.5% increase.

DataQuick's Andrew LePage says investors and other buyers targeting lower-priced homes were busy last month.

"Distressed sales are still driving the market and just over half of them in January were homes that have actually been foreclosed on in the prior year. On top of that you have another 20-25% of the re-sales that would be "short-sales."

That's when the lender agrees to take less for the house than what was owed.

Sacramento County's median sales price last month was $160,000, down 3% from the previous year.

As for sales of new homes - only 40 closed escrow last month, a record low. LePage says homebuilders just can't compete with the lower-priced resale market.