The California housing market wrapped up 2024 on a high note, showing resilience despite ongoing challenges. Existing single-family home sales in December reached 268,180 on a seasonally adjusted annualized rate, marking a slight 0.1% increase from November and a significant 19.8% jump from December 2023.

 

Steady Sales Growth

For the entire year, statewide home sales increased by 4.3% compared to 2023, marking the first annual gain in three years. This represents the largest yearly sales increase since June 2021, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). However, despite the positive momentum, total home sales remained below pre-pandemic levels.

 

 

Home Prices Continue to Climb

December’s median home price in California was $861,020, reflecting a 1.0% increase from November and a 5.0% rise from December 2023. For 2024 as a whole, the median price of existing homes climbed 6.3% from the previous year, with higher-end markets driving much of this growth. Homes priced above $1 million saw a remarkable 28.7% increase in sales, while sales in the sub-$500,000 segment dipped slightly by 0.4%.

 

 

Regional Market Trends

Four of California’s five major regions posted double-digit annual sales growth in December:

• • Central Coast: +20.5%
  • Southern California: +16.3%
  • Central Valley: +15.1%
  • San Francisco Bay Area: +14.6%
  • Far North: +6.3%

Southern California, while seeing strong year-end numbers, may experience a temporary slowdown due to wildfire-related disruptions, with a potential rebound expected in spring 2025.

Inventory and Market Supply

The statewide Unsold Inventory Index, which measures how long it would take to sell the current housing stock at the current sales pace, stood at 2.7 months in December, down from 3.3 months in November but slightly up from 2.6 months in December 2023. While inventory remains tight, rising mortgage rates could lead to more homes entering the market in early 2025.

 

Looking Ahead to 2025

Despite strong year-end performance, experts warn of potential challenges in 2025. Factors such as inflation, the ongoing insurance crisis, and policy changes under a new White House administration could impact the market. However, with mortgage rates stabilizing and demand expected to rise in the spring, California’s housing market may continue to see moderate but steady growth.

Stay tuned for more updates as we monitor the evolving real estate landscape!

Source = California Association of Realtors