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Current State of the California Housing Market?
$856,700 – that’s the middle pricing home sale price in California today! This steep price point has contributed to an 8.7% decrease in home sales compared to July last year, when the median price was $783,700. With mortgage rates around 6.5%, many potential buyers are hesitant to make a purchase, which will make the selling isn’t an easy task neither-less the having a cash offer.
What is the Current State of the California Housing Market?
The trend of homes selling above their list price is also on the decline. Only 47.9% of homes sold for more than their asking price, a 3 percentage point drop year-over-year which isn’t in your favour you are selling your house. Furthermore, 25.1% of homes experienced price cuts, marking a 3.5 percentage point increase from the previous year.
What does this indicate? More homes are having their prices reduced, suggesting that sellers are finding it more challenging to attract buyers. This shift points to a cooling market, which could be beneficial for buyers.
Despite this, there are still positive aspects for sellers, which
Southern California:
The Southern California market experienced an 11.1% year-over-year decline in home sales in June 2024, the combination of limited housing inventory and strong demand has kept home prices on an upward trend despite fewer sales.
Northern California:
In Northern California, the rate of home price declines has slowed or reversed in several areas, though most markets remain below their 2022 price peaks. The market is stabilizing, with counties such as Alameda, Contra Costa, and San Francisco seeing price increases of up to 4.9% year-over-year. This is consistent with the national trend of rising median home prices.l buyers are hesitant to make a purchase.
California Real Estate Market Analysis
Contrary to the national trend of high demand and low supply, California’s real estate market has shown growth in both home sales and property prices, even amid a slower market in 2023.
What’s Happening in California’s Real Estate Market?
It’s doing well! Home values in California have surged by 40.6% over the past five years. In January 2024, home sales saw an 8.6% increase year-over-year (YoY), and the mortgage rate climbed to 7.28%. The housing market in California remains robust and in high demand. Even with the rising mortgage rates, home sales are not expected to decline. If you’re thinking about selling a property in California, now is an ideal time to list it on the MLS.
List Your California Home for Sale: Prospective buyers and their agents are actively searching the MLS for ready-to-move-in properties. Start your listing for FREE and get multiple cash offers!
Key Statistics in California’s Real Estate Market
Average Home Prices: The median home price in California is $739,100, an increase of 6.5% YoY. Experts anticipate further price hikes due to limited inventory. The current sale-to-list price ratio stands at 99.4%, up by 1.3 points YoY compared to September 2023.
Home Sales: January 2024 saw an 8.6% YoY increase in home sales, with 16,220 homes sold compared to 14,941 in January 2023 which shows a decrease again.
Average Rent Prices: Rent prices differ across the state. In Los Angeles, the average rent is $2,742, while in San Diego, it’s $3,016 which will make it going to be a catchy thing for the buyers of your house but they must have it immediately which requires a cash sale
Median Days on Market: Homes for sale had a median market time of 45 days, down by 10 days which is back to the fact that all the sellers are seeking a cash offers and you don’t do that yet.
Pending Sales: The number of homes for sale decreased by 6.7% YoY from 2023. Currently, there are 65,820 homes available in California.
Months of Supply: The average supply is 3 months, indicating that California’s inventory is less constrained compared to the national housing market.
Predictions for California’s Housing Market in 2024
Sellers Returning to the Market: Homeowners who delayed selling in 2023 are expected to return, especially those needing to relocate for new jobs or seeking more affordable living options. Baby boomers looking to downsize could reach 30 million housing units to the market.
Stabilizing Mortgage Rates: Mortgage rates, currently at 6.9% in February 2024, are expected to stabilize in the second half of the year, although likely staying above 6%.
Rising Number of Home Buyers: High interest rates buyers at bay in 2023, but mortgage demand increased after rates dropped to 7.28% in November. Making the inflation and stabilizing rates should attract more buyers.
Continued Home Price Increases: Home prices have been on a steady rise in major California metros, reaching $739,000 in January 2024. Experts foresee this trend continuing until the supply-demand balance shifts.
Increase in New Home Construction Sales: In September 2023, 12.3% of home buying were new constructions, the highest since 2022.
Builders offered concessions of $30,000 to attract buyers which make us in a better place, and this trend is expected to persist in 2024.
Lowball Offers from iBuyers: iBuyers offered 104.1% of market value in 2021, 86% in 2022, and around 70% in 2023. Companies like cash offer option and 99offers have faced significant losses and are expected to continue making lowball offers.
Negotiable Buyer Broker Commissions: A recent jury decision in Missouri awarded over $5 billion in damages to plaintiffs, prompting home sellers nationwide to challenge the National Association of Realtors’ (NAR) Cooperative Compensation Rule. This rule mandates that listing brokers offer competitive compensation to buyer agents to list properties on a NAR-affiliated MLS.
California Real Estate Market Update
Legal Challenges to Buyer Agent Commissions
Lawsuits like Moehrl, Gibson, Batton, Nosalek, and Batton 2 are challenging the Participation Rule. They accuse the National Association of Realtors (NAR) and other top real estate companies of colluding to keep agent commissions high. If the jury finds the defendants guilty in these cases, the landscape of buyer agent compensation could change significantly. While buyer agents are unlikely to become obsolete in 2024, they may become more open to negotiating commissions to stay competitive.
Will the Housing Market Crash in California?
A housing market crash in California is unlikely. The state’s attractive features, including its thrilling theme parks, diverse cuisine, and stunning coastline, will continue to draw buyers. California, the second-largest state in the U.S., saw around 125,000 movers in 2022. Arcadia is the fastest-growing city in 2024, and Southwest California, particularly the Miami-Fort Lauderdale-Pompano Beach area, remains highly sought after.
California’s job market is robust, with an unemployment rate of 5.1%. The private sector employment grew by 6.7% in August 2023, outpacing the national average of 2.0%. California’s tax policies are favorable, and the average cost of living is $53,082 with a median household income of $91,905. Living on the coasts remains relatively affordable, making a housing market crash improbable in the near future, which will give the buyers a good hand there and you too if you are selling.
2024: A Buyer’s or Seller’s Market, what to choose and how to do it?
The year 2024 is shaping up to be excellent for sellers and potentially favorable for buyers as well. Home prices in California are on the rise and are expected to continue climbing until the supply-demand dynamic shifts. As of January 2024, there were 65,820 homes for sale in the state.
This is an optimal time to sell a house in California. The mortgage rate dropped from a two-decade high of 8% to 7.28% in January, leading to more new listings on the market. Homeowners who previously hesitated to sell due to mortgage rate locks are now adjusting to 7% rates. By Spring 2024, more homeowners are expected to list their properties on the California MLS, further enhancing the market dynamics.
In conclusion, What to do and How to sell your house fast for cash?
The way into doing it is making the right choice for the right service to help you selling and the online market of real estate is growing massively there in California, so why not to do it as soon as you can that’s the question, and here comes Cash Offer Option which provides you with multiple cash offers from the sellers in your state and enter the housing market in California.
Take your Chance now and Sell Your House Fast For Cash:
FAQs About the California Real Estate Market
Q: How have home prices in California changed recently?
A: Home prices in California have seen a significant increase. As of early 2024, the median home price is $739,100, up by 6.5% year-over-year.
Q: Are home sales in California increasing or decreasing?
A: Home sales in California increased by 8.6% year-over-year in January 2024, with 16,220 homes sold compared to 14,941 in January 2023.
Q: How are rising mortgage rates affecting the California housing market?
A: Despite rising mortgage rates, the California housing market remains resilient with continuous demand and increasing home sales.
Q: Is a housing market crash expected in California?
A: A housing market crash in California is unlikely. The state’s attractive living conditions, strong job market, and favorable tax policies continue to draw buyers, maintaining a robust housing market.
Q: What are the predictions for California’s housing market in 2024?
A: Predictions for 2024 indicate that home prices will continue to rise, more homeowners will list their properties, and mortgage rates will stabilize. The market is expected to favor sellers, but opportunities for buyers will also be present.
Q: How long do homes typically stay on the market in California?
A: As of early 2024, the median days on the market for homes in California is 45 days, which is a decrease of 10 days year-over-year.
Q: How is the rental market performing in California?
A: Rental costs vary by location, with the average rent in Los Angeles at $2,742 and in San Diego at $3,016. The rental market remains competitive.
Q: What is the current inventory of homes for sale in California?
A: As of January 2024, there are 65,820 homes for sale in California, indicating a slight decline in inventory compared to the previous year.
Q: What factors are contributing to the strong demand for homes in California?
A: Factors contributing to the strong demand include California’s desirable living conditions, a strong job market, relatively affordable coastal living, and favorable tax policies.
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