Despite a consecutive second month of declining home sales in California, it has not hindered the rise in housing prices. The latest report from the California Association of Realtors (C.A.R.) shows that the median home price in California surpassed $900,000 in April, reaching a historic high. When divided by regions, there exists an extreme disparity between the most expensive and the most affordable housing markets in California.
Entering the spring home buying season, with factors such as increasing new listings and potential buyers not feeling rushed to purchase, many people were hopeful that housing prices in California would decrease. However, the reality is that while the rate of increase in home prices in the first quarter slowed down, it still showed an upward trend.
According to a report released on May 19 by C.A.R., the median home price statewide in April reached $910,160, marking a 22nd consecutive month of year-over-year increase, with a 2.9% rise from March. Compared to the same period last year when the median home price first exceeded $900,000, it was higher by 0.7%.
Looking at the different regions in California, the San Francisco Bay Area was the only region among the state’s five major regions where home prices declined annually, dropping by 1.7%, with over half of the counties in the area experiencing price decreases.
The prices in the other four regions showed more moderate increases: the Far North region saw the largest increase in median home price, up by 4.3% compared to last year; the Central Coast region increased by 1.2%, Southern California by 0.8%, and the Central Valley by 0.3%.
When broken down by county, Trinity County in Northwestern California saw a whopping 57% increase in median home price compared to the same period last year; Plumas County and Lassen County in the Northern part also had remarkable increases of 54.7% and 48.8%, respectively.
Housing prices in California are more than double the national average. Within the state, there are extreme differences in home prices among different counties. For example, the median home price in the most expensive areas can exceed $2 million, while in some remote areas, the median home price is below $300,000.
Top Housing Prices: In April, San Mateo County on the San Francisco Peninsula had a median home price exceeding $2.28 million, Santa Clara County at $2.12 million, San Francisco County at $1.78 million, and Marin County, just across the bay from San Francisco, at $1.72 million.
Lowest Housing Prices: In the Far North region, Siskiyou County saw a median home price of $290,000 in April, Lassen County at $305,000, Glenn County at $307,000, Lake County at $325,000, and Trinity County at around $332,000.
Since September 2022, monthly home sales in California have remained below 300,000 units. Even though it’s now in the spring home buying season, the existing single-family home sales in April fell by 3.4% compared to the previous month, totaling less than 270,000 units due to the continuing decline in market sentiment.
“This year’s spring home-buying season started off slow in the real estate market,” said Heather Ozur, President of C.A.R. “As home prices gradually rise and mortgage rates remain high, homebuyers are showing some hesitancy in an environment of economic uncertainty.”
Jordan Levine, Chief Economist at C.A.R., believes that the pace of price growth is slowing down. “Continued economic uncertainty slightly dampens demand, and stable inventory growth has led to a more moderate price increase this year.”
Experts predict that mortgage rates will not decrease. Chen Zhao, Director of Economic Research at real estate brokerage Redfin, stated in a release, “Unless all new tariffs are canceled, or the U.S. experiences a significant economic downturn— which would reduce the housing budgets for many Americans— mortgage rates are unlikely to decrease.”
According to data from Freddie Mac, in the week ending on May 15, the average fixed mortgage rate for a 30-year loan was 6.81%, and for a 15-year loan, it was 5.92%.
(This article is for general reference only and does not constitute investment, tax, legal, real estate, or financial planning advice.)