Written By Ankit Arora
California homes continued to sell at eye-popping prices last month. The median home sale price rose 6.5% year-over-year from $693,800 to $739,100 in January 2024. The number of homes sold increased from 14,941 to 16,220.
Interest rates are at 7.28%, but is California still a seller’s market? Let’s look at the facts.
Los Angeles homes sold for a median sale price of $947,500 in January 2024, up 2.5% year-over-year. Homes in San Diego sold for a median sale price of $909,000, a 14.8% increase year-over-year. There were no markets in California where prices declined year-over-year.
Interest rates are at record highs, with few home buyers. But the inventory is so low that 35.9% of homes sold above the list price!
If You Are a Home Buyer: You can avoid bidding wars and avail seller concessions if you buy a home now. The 7.28% interest rate and mortgage payments are significant, but rates are unlikely to drop in the next few months. If they do, you can refi.
If You Are a Home Seller: You can lock in California’s high home prices. Homes listed on MLS sell faster and for 17.5% more than off-MLS homes.
The current California real estate market statistics don’t reflect the national trend of high demand and low supply. Home sales and property prices in California increased despite 2023’s slow market.
List on MLS and Get up to 17.5% More 🚀
So, How Is the Real Estate Market in California?
Swell! Home values in California rose by 40.6% in the last 5 years. Home sales increased by 8.6% in January 2024 YoY and the mortgage rate climbed to 7.28%! So, California’s housing market remains resilient and in demand.
Even if mortgage rates continue to increase alarmingly, home sales will not falter. So, if you want to sell a California property, now is the right time to list it on MLS.
California Real Estate Market Statistics
Average Home Prices: The average median home price in California is $739,100, up by 6.5% YoY. In 2024, experts predict the median sale price will increase due to the tight inventory. Currently, the sale-to-list price ratio is at 99.4%, with an incline of 1.3 pt YoY compared to September 2023.
Home Sales: As per January 2024 data, home sales increased by 8.6% YoY! In Jan. 2024, 16,220 homes were sold, up from 14,941 in Jan 2023.
Average Rent Prices: Rental costs vary statewide. An average tenant in Los Angeles pays $2,742, while the one living in San Diego pays $3,016.
Median Days on Market: The median days on the market for homes for sale was 45 days, down by 10 days YoY.
Pending Sales: The number of homes for sale dropped by 6.7% YoY compared to 2023. Currently, there are 65,820 homes for sale in California.
Months of Supply: The average months of supply is 3 months. California’s inventory isn’t as squeezed as the national housing market.
California Housing Market Predictions 2024
Californians have survived the shockwaves of skyrocketing mortgage rates and rising home prices of 2023. Here’s what we predict for California’s housing market:
1. Home Sellers Will Return to the Market in 2024: Sellers who chose the sidelines in 2023 will come back. Especially those who can’t avoid new jobs or want to move to a cheap place. Whitney, the analyst who predicted the 2008 financial crisis accurately, has forecasted that baby boomers looking to downsize will also add up to 30 million housing units. Yowaza!
2. Mortgage Interest Rates Will Stabilize by the 2nd Half of 2024: Mortgage rates 6.9% in Feb. 2024, continue to rise, nearing seven percent. We think the rates will remain above 6%, but they will stabilize in the second half.
3. The Number of Home Buyers Will Rise: The historically high interest rates averted buyers in 2023. But mortgage demand rose after the interest rates lowered to 7.28% in November. The easing inflation and stabilizing rates will bring back house hunters.
4. Home Prices Will Continue to Rise: Home prices rose steadily in the top metros across CA YoY, reaching $739K in January 2024. Experts predict home prices will continue to rise until the low supply-high demand dynamic changes.
5. New Home Constructions Sales Will Increase: 12.3% of homes purchased in September, 2023 were new homes, the highest since 2022. Home builders offered $30,000 worth of concessions to attract buyers in 2023. We think builders and sellers will compete for buyers in 2024.
6. iBuyers Will Continue to Make Lowball Offers: iBuyers offered 104.1% of market value in 2021. They offered 86% in 2022 and around 70% in 2023. Opendoor and Offerpad have lost billions of dollars in 2023. As they struggle to survive, they will make lowball offers.
