When Will the Housing Market Crash in California?
A housing market crash in California is unlikely.
California’s thrilling theme parks, diverse and delicious cuisine, and stunning coastline will continue to attract buyers. The Golden State is already the second-largest state in the U.S., with around 125,000 movers in 2022.
Arcadia is the fastest-growing city in 2024. House hunters want a place in Southwest California; the most common neighborhood is the Miami-Fort Lauderdale-Pompano Beach area.
California’s job market is also strong. The unemployment rate is at 5.1%. In fact, California’s private sector employment grew by 6.7% in August 2023, faster than the national average of around 2.0%. And California’s friendly tax policies are a cherry on the top.
The average cost of living in California is $53,082. The median household income is $91,905. Living on the coasts of California is relatively affordable. So it is unlikely that California’s housing market would crash anytime soon.
2024: Is It a Buyer’s or Seller’s Market?
2024 will be a terrific market for sellers. (And buyers, too!)
Home prices in California are rising and will continue to rise till the supply-demand dynamic changes. The number of houses for sale in CA was 65,820 in January 2024. This is regarded as the best time to sell a house in California.
In January, the mortgage rate plummeted from a two-decade-high rate of 8% to 7.28%, adding more new listings on the market. This shows that those who refused to sell due to mortgage rate lock are finally acclimatizing to 7% rates. Come Spring 2024, more homeowners will follow suit and list properties on California MLS.
The increase in new home listings in California has also brought back home shoppers who were hugging the sidelines. In fact, the recent uptick in mortgage applications shows that buyers are returning.
House hunters who could not find affordable homes in 2023 will also start shopping in 2024. The demand for California houses will increase – and that’s why sellers may be able to dominate the market.
However, new builds will compete for attention from buyers. Home builders have persuaded buyers to buy new construction homes with mortgage buydowns worth $30K in 2023! Builders will continue offering concessions in 2024, and home sellers may have to wage wars against them.
Listings of new constructions, baby boomers looking to downsize, and desperate home sellers will flood the market in 2024. The properties for sale in California will increase. So, whether you are looking for a condo in Los Angeles or a single-family primary home in San Diego, you will find your dream home next spring.
