Housing in California
For decades now, California property has been incredibly high. However, in the last few years alone, it has seemed that housing prices have skyrocketed throughout the Golden State.
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Now, many middle-class families cannot easily afford to own a home in many places in the state. This has left many feeling locked out of the housing market.
California’s Housing Shortage
One issue that’s driving these rise in housing prices? An ongoing housing shortage. Simply put, California doesn’t have enough affordable homes to go around.
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As a result, there are only a few houses for sale on the market at a time. This has led to a small supply, yet a huge demand. Prices have continued to soar because of this constant demand.
Higher Mortgage Rates
A rise in mortgage rates has also led to many current homeowners deciding against putting their homes on the market. These homeowners currently have lower rates on their loans. They don’t want to have to get a higher mortgage rate on a new loan, for a new house, if they sell their current one.
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This has also led to fewer homes being on the market. However, higher mortgage rates haven’t seemed to curb demand completely.
New California Data
According to fresh data from the California Association of Realtors (CAR), more homes are finally being put on the market in California.
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This data has confirmed that active listings have risen greatly when compared to last year. If more homes are being put on the market throughout the state, then this could potentially help with lowering the skyrocketing prices.
Expensive California Homes
However, it hasn’t seemed to impact the price of homes in California yet. Homes remain incredibly expensive throughout the state.
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According to this recent report, the median price of a home in California jumped almost 8% in March of 2024 to $855,000 when compared to what was seen last year. March’s prices jumped about 6% from February’s prices alone.
Home Selling Season
There are likely many reasons why California is seeing more homeowners putting their houses on the market. The California exodus is one reason, as people may continue to be selling their homes to move out of state.
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However, it’s also important to note that more homes tend to be sold in the spring and summer months.
Homes Go Quick in California
This recent data has also confirmed that homes in California tend to be snatched up by buyers quickly. Sellers in the state can expect to see their homes not staying on the market for too long.
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On average, it can take a seller about 19 days to successfully sell a single-family home. Last year, it took about 24 days.
A Good Time To Sell
Many analysts have stated that it’s a good time for homeowners to sell their homes if they’re looking to make a profit. CAR’s chief economist Jordan Levine further discussed this.
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“It’s a great time to sell a home in California,” Levine explained. “About half the homes are now selling above list price once again and prices themselves are rising.”
Sales Are Still Down
However, this latest data did confirm that home sales have dropped — even though demand is clearly still there to some extent. Sales are down by about 8% when compared to last month. When compared to last year, sales are down 4%.
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Home sales may have dropped because of those pesky high mortgage rates. Homeowners with low rates on their loans don’t want to put their homes up for sale.
A Housing Shortage Remains
Because of these high mortgage rates, fewer homeowners are putting their homes up for sale in these busy spring and summer months. That only makes the housing shortage worse — and drives up the prices.
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“That has caused inventory to really dry up,” Levine said. “We have fewer homes available for sale on the market now than we did in the spring of 2020, when the economy was totally locked down.”
Regular Californians
These high home prices have further locked out many regular Californians. CAR’s recent data has revealed that about 85% of all California residents can no longer afford to buy a median-priced home.
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As more average Californians are pushed out of the housing market, they could continue to choose to move to a more affordable state.