California’s record median home price creeps closer to $900,000

California’s record median home price creeps closer to $900,000

May 25, 2022 0 By Madison Hirneisen

California’s median home price reached $884,890 in April – a figure that surpassed March’s previous record by 4.2%, according to the California Association of Realtors.

A contributing factor to the record-setting home prices the state is seeing is a “change in the mix of sales.” In recent months, California experienced stronger sales in high-priced markets than “their more affordable counterparts,” CAR wrote in a news release last week.

April was the third consecutive month that the share of million-dollar home sales increased, reaching 34.7%, according to CAR. Meanwhile, more affordable homes priced at under $500,000 declined in April and reached the “lowest level ever.”

“California’s housing market is moderating from the 12-year-high levels experienced in 2021, as higher mortgage interest rates and soaring home prices are starting to have an adverse impact on housing demand,” CAR Vice President and Chief Economist Jordan Levine said in a statement. “With April pending home sales recording the worst drop in two years, the affordability challenges that buyers have been encountering are materializing in recent sales trends, and further declines in housing demand could continue in the second half of the year.”

Experts from CAR say this “shift in the mix of sales” toward more expensive homes is likely to persist.

Year-to-date home sales statewide were down 7.4% in April, according to CAR. The association said that home sales were down in April as “rising interest rates and higher home prices depressed housing demand.”

Regionally, the Central Coast saw the largest decline in home sales of all regions in April, with sales dropping 21.3% when compared to a year ago, according to CAR. Both the San Francisco Bay Area and Southern California saw over 10% sales declines when compared to the previous year.

Despite declines in the number of homes sold, prices increased in almost all major regions across the state in April, CAR reported. Year-over-year, home prices increased 15.9% in the San Francisco Bay Area, 14.9% in the Central Valley and 13.4% on the Central Coast.

Meanwhile, active statewide listings reached the highest level in seven months during April, up more than 20% from last year, according to CAR.

“As rates remain on the rise, the sense of urgency to buy is keeping the market highly competitive, especially since housing inventory continues to stay well below pre-pandemic levels,” CAR President Otto Catrina said in a statement. “While we will likely see more listings come on to the market as we move further into the home-buying season, the housing shortage issue will likely persist throughout the rest of the year in major metropolitan areas, such as the Bay Area and the Southern California region.”

The data from CAR comes as Gov. Gavin Newsom and lawmakers continue to weigh their budget priorities ahead of the June 15 deadline, which includes discussions surrounding housing.

Earlier this month, Senate President Pro Tempore Toni Atkins announced a budget proposal to spend $10 billion over 10 years to help families across the state purchase homes. Under the proposal, first-time homebuyers making up to 150% of their area income could receive 17% toward purchasing a home.

“Everyone should have the opportunity to achieve that dream and invest in their families’ futures,” Atkins said regarding her proposal earlier this month.

This article was originally posted on California’s record median home price creeps closer to $900,000