California Home Prices Hit Another Record Highs in May 2024 – Norada Real Estate Investments

California housing market is again a market of two tales: soaring prices and a sales slowdown. Let’s get into the data care of the California Association of Realtors (C.A.R.).

Rising Rates, Cooling Sales—For most of this year, mortgage rates have been increasing since late 2023, and mortgage rates did their job in May. “More recently, sales had a slightly weaker performance than in April and were 6% below May last year. This marks the 20th month that sales have not breached the 300,000 units line, and sales year to date are unchanged.

C.A.R. President Melanie Barker feels the recent spike in mortgage rates is a major contributor to the sales malaise. But there is a ray of hope.”. Recent interest rate declines and a slow increase in available properties may turn heads back toward buyers before the peak summer homebuying season.

Record Prices The sales pace may be cooling, but prices continue to heat up. The statewide median home price set another record high in May at more than $900,000 for the second consecutive month. That is a whopping 8.7% more than last May of 2023; prices then were slightly higher than April’s record.

California has seen its 11th month in a row of annual price growth. A significant factor in this price surge is the tight supply of houses, particularly ones in the affordable range. Sales of million-dollar-plus homes are outpacing those of lower-priced options.

Million-dollar-and-up sales jumped 15.5% year-over-year in May, while homes under $500,000 fell by 12.2%. Homes above $1 million now represent 36.6% of all sales – the highest share in at least five years.

What Does This Mean to You? California’s housing market remains a complex landscape. If you are a buyer, expect competition and possibly an escalation of prices for something pocket-friendly. But there may be a window due to recent slumps in mortgage rates. If you are a seller, this appears to be the best time.

Low inventory and high demand might place you in an excellent position to pick out a top-dollar offer. Nonetheless, it’s always prudent to take advice from a realtor with respect to the price of listing and effective selling.

Increased pressure on prices is still expected in the coming months, influenced by seasonal factors and limited housing supply. Therein lies the rub: A potential bounce in sales and shifts in mortgage rates will just throw another wrinkle into the market. Stay in the loop, and stay connected with a professional in real estate to be better guided in making informed decisions within this rapidly changing market.

California’s housing market is experiencing a shift. Here’s a breakdown of the key trends:

More Homes on the Market

• Active listings are up for the fourth month in a row, with the biggest year-over-year increase in 15 months. This suggests a potential rise in housing inventory, which could moderate price growth.
• New listings are also surging, with year-over-year double-digit growth for five consecutive months. This indicates more sellers are entering the market.

Potential for Moderation in Mortgage Rates

• Recent economic reports hint at a cooling down of inflation, which could lead to more moderate mortgage rates in the coming months.
• This, along with the rise in active listings, could create a more balanced market for buyers.

County-Level Variations

• Almost all counties (49 out of 52) saw an increase in year-over-year active listings in May. The biggest increases were in Solano (85.4%), Santa Barbara (73.8%), and Alameda (72.9%).
• Only Tulare (-37.7%), Glenn (-23.7%), and San Francisco (-2.9%) saw a decrease in active listings compared to last year.

Stable Selling Time and Sales Price Ratio

• The median time to sell a single-family home in California remained steady at 16 days compared to May 2023.
• The statewide sales-to-list-price ratio also remained unchanged at 100.0%.

Increase in Price per Square Foot

• The average price per square foot for existing single-family homes increased to $446 in May, up from $407 a year ago.

Regional Sales Performance

• Home sales softened in most major regions compared to May 2023.
• The San Francisco Bay Area and Central Coast saw slight increases, while Southern California and the Far North experienced declines.
• The Central Valley remained flat despite higher interest rates.

County-Level Sales Fluctuations

• Sales dropped in 24 counties year-over-year, with Tehama County leading the decline at -38.5%.
• 29 counties saw sales increases, with Plumas County experiencing the biggest jump at 70.6%.

Regional Price Trends

• All major regions saw median price increases compared to May 2023.
• The San Francisco Bay Area and Southern California led with double-digit growth, while other regions saw more moderate increases.

County-Level Price Trends

• 40 counties had higher median prices than last year, with Plumas County leading the surge at 49.0%.
• Only 12 counties saw price dips, with Del Norte County experiencing the steepest decline at -27.0%.

Overall Market Outlook

The California housing market is showing signs of a shift towards a more balanced market. Rising inventory levels and potentially moderate mortgage rates could provide some relief for buyers, especially those targeting more affordable options. However, it’s important to note that mortgage rate fluctuations and inflation trends will be key factors to watch in the coming months.

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