California Home Prices Break New Bleak Record

This record-breaking report comes as many locals in the state cannot afford to buy a home. An ongoing housing shortage in California has further exacerbated this crisis.

Home prices have jumped about 11.4% when compared to prices seen last year, in April of 2023.

The most expensive county to live in is Santa Clara County, with an average house price of over $1.5 million. The cheapest within this top five in California is San Francisco County, with an average house price of over $1.3 million.

However, mortgage rates are now around 7%, yet people are still buying homes in California. Though rates have fallen slightly since October 2023 when it was almost 8%, this percentage remains high for many potential homebuyers.

“April’s rebound in both home sales and price shows the resilience of California’s housing market and is a signal that buyers and sellers are beginning to adjust to the higher interest rate environment,” Barker stated.

It is these people who have helped the prices to rise, and they are likely to continue to rise if this continues. With these prices rising, it will be a struggle for anyone not considered as wealthy to be able to afford anything in this area.

This is especially true as they will have to buy a new home themselves, so they, too, will be subject to the high house prices. Selling a home also means they would lose any equity they got from the sale of their house, which makes selling a home pointless.

This is because their money can go a lot further in these states than in California. However, this only applies to people who can move states. As many people cannot do this, the California real estate market is still pretty empty.

Some house prices are going down by more than $1 million. However, as many buyers are still struggling to come up with the money, sellers are still struggling to sell their houses, with many being on the market for more than 60 days.

One of these places is Ukiah, whose house prices have dropped by 6.52%. This area is between San Francisco and Eureka, where the average house price is $475,866.

Sometimes, people slow down in home buying during periods of economic uncertainty. That doesn’t appear to be the case in California at the moment.

As a result of this crisis, there aren’t enough houses on the market. This has helped home prices skyrocket in the past few years.

However, the state government has only been able to build half of this amount in the last decade, which has caused issues for people wanting to buy affordable housing in the Golden State.

Even though California is the third largest US state by size, most of it has hills and mountains across deserts. As none of these areas are suitable for living, there is only a limited amount of space available.

However, prices quickly fell again when buyers started pulling out of deals, and the number of available houses went up. However, this soon changed in 2024 when homeowners stopped selling, and there became a shortage on the market.

Since March 2024, home prices have risen by almost 6%. Sales of $1 million homes in the state have also increased and are currently up 40% since April of 2024.

However, more homes that previously weren’t worth this much money now are. Even previously affordable areas of California now have homes that are going for more than $1 million apiece.

Tustin currently has the fastest-rising housing prices in the entire state, as prices have risen by 11.7%. Now, this Orange County city has a median house price of $1 million.

Even though some analysts have claimed that a Bay Area exodus was underway, this California area has still seen a huge increase in housing prices, signaling a competitive market. Now, prices are up by 15.5%.

According to a 2023 report, home affordability in the state hit a new low not seen in 16 years. Now, residents in California need to make at least $222,800 a year to afford a home in the state.

“There’s kind of a tale of two economies happening where folks at the top end of the income spectrum are still punching above their weight,” Levine explained. “… But if you’re already right at the affordable level, there’s not a next tier down to shop in at all.”

This is especially because there are less homes available than people wanting to buy them. Even renting has become tricky. Due to both of these factors, most people are choosing to look elsewhere.

In addition, California’s population has been falling for three years in a row, mostly due to rising house prices. This means there is at least a bit more availability for people wanting to buy a home in the Golden State.

This tax is mostly targeting wealthy individuals and businesses. However, there is still worry among current Californian residents that this tax could significantly affect them and force them to stay in the state as opposed to being able to move to a cheaper area.