• Sun. Feb 25th, 2024

    California Housing Market Poised for Recovery in 2024

    ByNuala Hafner

    Jan 31, 2024
    California Housing Market Poised for Recovery in 2024

    The California housing market experienced a significant decline in 2023, with a 24.8% decrease in home sales compared to the previous year. This marks the largest annual sales decline in the state since 2007. However, real estate experts are optimistic that the market will bounce back in 2024.

    The shortage of homes for sale and high borrowing costs were major factors contributing to the challenging year in the housing market. Melanie Barker, president of the California Association of Realtors, expressed optimism for the coming year, stating that with mortgage rates expected to decrease, there will be a return to a more favorable housing market. Home prices are also projected to see a moderate increase in 2024.

    Despite the decline in sales, median prices in California have been on the rise. December’s median price of $819,740 represented a 6.4% increase compared to the same time last year. The annual median home price is expected to climb to $860,300 in 2024.

    Jordan Levine, the association’s chief economist, believes that the housing market recovery will be driven by declining interest rates and a more positive economic outlook. Americans are feeling more optimistic about the market as interest rates reach a seven-month low. However, tight housing supply will continue to be a challenge in the coming year.

    In December, sales volume decreased in all major markets in California compared to the previous year. The San Francisco Bay Area, in particular, saw an 11.4% decline in the number of homes sold. However, home prices in all major regions increased compared to December 2022, with the San Francisco Bay Area experiencing a significant jump of 12.6%.

    In counties like San Mateo and Santa Clara, home sales showed signs of improvement. In San Mateo County, December home sales rose 8.3% year-over-year, and the median sales price reached $1.8 million. In Santa Clara County, home sales slightly increased from December 2022, with the median home price reaching $1.72 million.

    Overall, the California housing market is expected to see a recovery in 2024. As interest rates decline and market activity gradually increases, buyers and sellers can look forward to a more favorable housing market.

    An FAQ section based on the main topics and information presented in the article:

    1. What was the state of the California housing market in 2023?
    The California housing market experienced a significant decline in 2023, with a 24.8% decrease in home sales compared to the previous year. This marks the largest annual sales decline in the state since 2007.

    2. Why did the housing market decline in 2023?
    The shortage of homes for sale and high borrowing costs were major factors contributing to the challenging year in the housing market.

    3. What are the expectations for the California housing market in 2024?
    Real estate experts are optimistic that the market will bounce back in 2024. Mortgage rates are expected to decrease, leading to a more favorable housing market. Home prices are also projected to see a moderate increase.

    4. How have median home prices in California fared?
    Despite the decline in sales, median prices in California have been on the rise. December’s median price of $819,740 represented a 6.4% increase compared to the previous year. The annual median home price is expected to climb to $860,300 in 2024.

    5. What will drive the housing market recovery?
    The housing market recovery is expected to be driven by declining interest rates and a more positive economic outlook. Americans are feeling more optimistic about the market as interest rates reach a seven-month low. However, tight housing supply will continue to be a challenge in the coming year.

    6. How did different regions of California fare in terms of home sales?
    In December, sales volume decreased in all major markets in California compared to the previous year. The San Francisco Bay Area saw an 11.4% decline in the number of homes sold. However, home prices in all major regions increased compared to the previous year, with the San Francisco Bay Area experiencing a significant jump of 12.6%.

    7. Are there any counties in California that showed improvement in home sales?
    Counties like San Mateo and Santa Clara showed signs of improvement. In San Mateo County, December home sales rose 8.3% year-over-year, and the median sales price reached $1.8 million. In Santa Clara County, home sales slightly increased from December 2022, with the median home price reaching $1.72 million.

    Definitions:
    1. Mortgage Rates: The rate of interest charged on a mortgage loan used to finance the purchase of a home.
    2. Median Price: The middle price point when all home prices are listed in numerical order, with half the prices being higher and half being lower.

    Suggested Related Links:
    1. California Association of Realtors
    2. National Association of Realtors
    3. Freddie Mac
    4. Fannie Mae