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Average Home Prices in California to Rise
California’s housing market just like the US housing market, is subdued by a continued lack of supply, affordability issues, buyer anxiety, hope for falling prices, and very high home prices.
In September, California home prices rose to an average of $605,680. This is down slight 1.9% MTM and 4.7% YTY. Zillow believes home prices will rise another 2.5% in the next 12 months. That might be a very conservative estimate if a trade deal is struck with China. Interest rates are expected to remain very low along with unemployment.
Mortgage Payment vs Home Price
Mortgage payments fell dramatically: San Francisco down 16% and in Los Angeles fell 7%.
Home Sales Report CA
California Association of Realtors released its latest report and there are some good signs. Month to month sales jumped 6% in the San Francisco Bay Area, while prices fell 5.4%. Contra Costa and Santa Clara also saw sales slump MTM. Average home prices in Los Angeles are 4.5% higher than 12 months ago. Sales sales in San Diego rose 16.3% YoY, while home prices actually fell slightly. Sacramento homes sales fell almost 13% MTM while prices leveled off.
California home prices are rising faster than this time last year. Sales of homes in the $400k to $1 Million range saw very strong growth. The cheapest homes suffered a 7% setback in September. October’s figures will be released by December.
Besides lower mortgage rates (The 30-year, fixed-mortgage averaged 4.27%), falling mortgage payments, higher home inventories, and a continuing robust economy, buyers are choosing to sit it out until the US trade situation stabilizes. Buyers might be wary of overbidding at a time when a recession or even a housing crash is possible in 2020.
For buyers with funds, active listings are on the rise. Active listings are up 30% in Southern California. And for sellers prices are expected to rise. Once the economy resumes its strong growth, and jobs growth, we may see stronger price growth than expected.
NAR said home prices rose 7.9% last year and Zillow believes home prices will further rise 7.3% this year. Cities with the highest price growth are Los Angeles, Tehama, Santa Barbara, Yuba, Merced, Santa Cruz and San Bernardino.
Predictions about California’s metro housing markets by CAR Realtors sees a balanced market with homeowners hanging onto their homes and buyers unable to afford to buy. Without good locations to move to, and high prices for what’s available means everyone is staying put and fewer pending sales. CAR believes this will subdue sales.
The condo segment of California’s housing scene is where the action is. Prices of condos keep rising due to the low availability and high prices of detached homes.
There’s plenty of housing bubble theories but a crash seems pretty far off with home equity strong and delinquency rates very low. This graphic of southern California home stats shows just how strong the drop in sales has been.
Best Performing Cities in California
Where to buy your next home in the Golden State? Homesnacks conducted an estimate based on about 5,000 population and growing, rising home prices, and within 20% of state price average. Here’s their best picks:
- Dos Palos
- San Pablo
- Los Banos
- Lake Elsinore
Realtors will need better strategies on how to get people to sell their homes.
China Tariffs and 2019/2020 Growth
China trade tariffs and US business repatriation could stimulate California’s economy and encourage more home building. Many believe America First may not be good for California, New York, or Florida or other states that depend on International trade. And many multinationals are headquartered in California and New York City.
Now that we’re past 2 years, the pain will be much less and a US first business agenda will bolster the stock markets more and power up employment in California.
Zillow expects California home prices to rise from $554,000 currently to $559,000 in October of 2019. Zillow giave California’s housing markets a 9.6 health rating overall and sees a price growth rate of 8.6%. The average home rental in California is $2500 per month. Mortgage delinquency rate is very low at .6%.
California Home Price Growth 2017 to 2018 by County
|California County||Sold||Median Price 2017||Median Price 2018||% Change YoY|
|Contra Costa County||1050||$570,750.00||$550,000.00||3.8|
|Los Angeles County||5291||$581,000.00||$570,000.00||2|
|San Diego County||2643||$550,000.00||$540,000.00||1.9|
|San Francisco County||363||$1,325,000.00||$1,160,000.00||14.2|
|San Joaquin County||792||$386,500.00||$350,000.00||10.4|
|San Luis Obispo County||247||$599,000.00||$585,000.00||2.4|
|San Mateo County||407||$1,250,000.00||$1,200,250.00||4.1|
|Santa Barbara County||293||$545,000.00||$466,250.00||16.9|
|Santa Clara County||1146||$1,000,000.00||$1,000,000.00||1|
|Santa Cruz County||144||$727,000.00||$658,500.00||10.4|
Above California housing data courtesy of CAR.org
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