02-26-2025_The California housing market had a rough start for the year as mortgage rates extended their upward trend in the first two weeks of 2025 and devastating wildfires in Southern California destroyed thousands of homes. Statewide home sales pulled back in January and reached their lowest level in 13 months and the 10% month-to-month decline was the biggest dip in 30 months. Open-escrow sales in January also dipped from their year-ago level and had the largest year-over-year decline in 14 months.

02-23-2024_The U.S. economy survived 2023 without going into a recession, as consumers turned out to be more resilient than most economists expected. Despite going through high inflation, banking crisis, and rounds of layoffs by some of the high-profile companies in the past year, consumers remained upbeat and their confidence recovered somewhat at the end of 2023. The housing market, on the other hand, had a rough year as mortgage rates remained elevated and supply continued to be tight.

03-03-2023_Over the past year, the housing market in California has shifted dramatically and rapidly. At the end of 2020, existing single family home sales totaled more than 500,000 units on an annualized basis-the highest level of transactions in California in over a decade. In 2021, the momentum continued as home sales averaged nearly 450,000 units for the year-a 12-year record as well. By the end of 2022, home sales had retreated by nearly 50% to less than 250,000 units on an annualized basis.

09-06-2022_The housing market is slowing with sales declining and home prices softening. Home sales in California dropped 31.1% year-over-year in July 2022 and last month was the third consecutive month with sales falling more than 10% from a year ago. Prices also began to moderate in the past couple months after the statewide median price set a record high in May. The July median price of $833,910 in California was the lowest in five months and the less than 3% year-over-year growth rate was the smallest gain in the past 25 months. With rates rising and the economy slowing, the downward shift in the housing market will continue as the year approaches its holiday season.

03-09-2022_In addition to an extremely tight housing market in California, prospective homebuyers are also now facing the prospect of a rising cost of living on everything from cars to gas to groceries to consumer goods. This, in turn, has triggered a more aggressive stance by the Federal Reserve, which has signaled that they are prepared to raise their target interest rate several times this year in order to stave off further inflation. Thus far, interest rates for 30-year, fixed-rate mortgages have already risen from an all-time low of 2.65% at the beginning of 2021 to nearly 4% by February 2022.

09-24-2021_There is no doubt that the coronavirus pandemic was an unprecedented shock. However, unlike the 2008 financial crisis, housing was a bystander as external forces disrupted the macro environment rather than a culprit in building up systemic, fundamental imbalances in the financial system. That is an important distinction when it comes to the question of both foreclosures and home prices.

08-09-2021_The housing market in California has been red hot since last July with home sales for the first half of 2021 surging above last year by 34 percent. Home prices, meanwhile, continue to climb with the statewide median price setting record highs for four straight months since March 2021. On the other hand, supply remained tight as for-sale properties consistently dipped below year-ago levels by 40 - 50 percent in the first half of the year.

05-07-2021_California just set a new record for home prices, rising by almost 25% from the same time last year to a median of almost $760,000. Does that mean that the market is in another bubble? Price growth has certainly accelerated as 9 months of rebounding home sales has taken a tremendous toll on housing inventory. However, much of the increase in home prices can be explained by 3 factors: inflation, falling interest rates, and income growth.

02-24-2021_The housing market ended 2020 on a strong note as sales reached the highest level in 15 years and the statewide median price set another new record. After experiencing one of the sharpest declines in years in the second quarter of 2020, California home sales bounced back with a year-over-year gain of nearly 20 percent in the second half of 2020, and the state housing market pulled off an annual growth rate of 3.5 percent. Despite the pandemic and two lockdowns, the housing market remains a rare bright spot in a struggling economy that is slowly recovering.

12-28-2020_The California housing market is red hot as the year comes to an end. The state has already recovered all the sales it lost in the first half of the year as insatiable housing demand in recent months has propelled sales to levels not seen in the past 15 years.