How competitive is the California Real Estate market? In May 2024, 49.9% of homes in California sold above list price, up 0.9 points. There were only 25.9% of homes that had price drops, up from 20.0% of homes in May last year. There was a 101.4% sale-to-list price, up 0.4 points year over year.
The revised California median home price forecast is for a rise of 6.2% to $860,300 in 2024 a 1.5% drop this year to $810,000 from $822,300 in 2022. A persistent housing shortage and a competitive housing market will continue to put upward pressure on home prices next year.
California home prices are hitting record highs but sales are slowing down due to rising mortgage rates.
In May 2024, California’s housing market faced significant challenges due to the highest mortgage rates since late 2023. These elevated rates significantly dampened home sales on both a monthly and annual basis. Despite this, the statewide median home price exceeded $900,000 for the second consecutive month, setting yet another record high, as reported by the California Association of REALTORS®.
C.A.R. President Melanie Barker noted, “California home sales stalled in May as mortgage rates reached the highest level in five months and may have contributed to the slowdown in market activity.” However, she also pointed out that recent moderation in interest rates and improvements in housing inventory could present opportunities for motivated buyers to reenter the market before the peak homebuying season.
Stronger sales of higher-priced properties have significantly contributed to the growth in median prices. In May, sales in the million-dollar-and-higher market segment rose by 15.5 percent year-over-year, whereas sales in the sub-$500,000 segment declined by 12.2 percent. Homes priced above $1 million now constitute 36.6 percent of all sales, the highest share in at least the past five years.
California real estate appreciation has historically been strong, but recent quarters show a potential shift. Long-term trends indicate the state remains a top performer compared to the national average.
