California’s high housing prices have scared off many potential buyers. In September, while the state saw a slight increase in home sales volume, the median home prices varied greatly across different regions, with some cities experiencing a staggering increase of $250,000.
The report released by the California Association of Realtors (C.A.R.) on Wednesday, October 16, indicated that after five consecutive months of year-over-year declines, California’s residential sales in September showed a moderate monthly and annual growth trend, with over 277,000 homes sold after seasonal adjustments.
However, California has seen 36 consecutive months of sales below 300,000 units, a clear contrast to the buying frenzy during the pandemic. High housing prices and interest rates have become the main factors suppressing the housing market.
Speaking of home prices, the average median home price in California in September was $883,000, a 1.7% decrease from August. The cities with the largest price drops were mainly concentrated in the previously popular Central Coast regions such as Santa Barbara, Santa Cruz, and extreme Northern California.
Meanwhile, prices continued to rise in some popular cities in both Northern and Southern California, with the Bay Area being the most representative region.
For instance, in September, the median home price in San Francisco was $1.75 million, a staggering $250,000 increase from August, representing a 16.7% rise. In Marin County, the median home price in September rose to $1.65 million, an 8.4% increase. In the expensive housing market of San Mateo, the median home price reached $2.15 million in September, a $162,000 increase from August, showing an 8.1% rise.
In Southern California, the median home price in Los Angeles was around $980,000 in September, a 5.4% increase from August. Orange County saw its prices at approximately $1.4 million, a 1.2% increase from August.
However, the coastal city of San Diego showed slightly weaker performance, with the median selling price of existing single-family homes falling below $1 million for the first time in September, dropping from $1.025 million in August to $990,000, a 3.4% decrease; compared to the same period last year, this was a 1% decline.
Looking ahead to the next year’s trends, Oscar Wei, Deputy Chief Economist of C.A.R., stated in an interview with Epoch Times that they predict California’s housing prices will not see a significant surge in 2026 but rather have a moderate growth of 3.6%, maintaining around $905,000.
According to a statistical report released by real estate data company Cotality in August, California’s housing market continues to attract investors. They prefer all-cash purchases to offset the impact of high interest rates. Additionally, high rental returns can compensate for the current high housing prices.
Among many cities in the United States, investors are particularly keen on the housing markets of Santa Jose, Los Angeles, Orange County, San Diego, and other regions in California.
C.A.R.’s report also indicated a slight decrease in the Unsold Inventory Index (UII) in September, reflecting a decrease in active listings and slower market supply growth.
Looking at Freddie Mac data, as of the week ending on October 16, the average 30-year fixed-rate mortgage stood at 6.27%, while the 15-year fixed-rate mortgage averaged at 5.52%.