California Real Estate Market 2024
Richard Evanns June 21, 2024
Richard Evanns June 21, 2024
The California housing market is a critical topic, driven by high demand, fluctuating supply, and economic influences. The median home price in California regularly surpasses national averages due to limited housing supply and high demand from a growing population, investors, and shifting economic policies. Mortgage rates, property taxes, and zoning laws are major factors affecting home affordability and housing availability across the state. This article answers pressing questions about the California housing market, leveraging expert insight and authoritative sources.
The California Association of REALTORS® (C.A.R.) released its 2024 California Housing Market Forecast, which includes the statistic for existing, single-family home sales. The forecast predicts that existing, single-family home sales are expected to total 327,100 units in 2024, representing an increase of 22.9 percent from the projected pace of 266,200 units in 2023. The California median home price is forecast to rise by 6.2 percent to $860,300 in 2024.
Here is a chart summarizing the existing, single-family home sales and median prices for California from 2017 to the forecast for 2024:
| Year | SFH Resales (000s) | % Change | Median Price ($000s) | % Change |
| 2017 | 424.9 | 1.7% | $537.9 | 7.1% |
| 2018 | 402.6 | -5.2% | $569.5 | 5.9% |
| 2019 | 398 | -1.2% | $592.4 | 4.0% |
| 2020 | 411.9 | 3.5% | $659.4 | 11.3% |
| 2021 | 444.5 | 7.9% | $786.8 | 19.3% |
| 2022 | 342 | -23.1% | $822.3 | 4.5% |
| 2023p | 266.2 | -22.2% | $810.0 | -1.5% |
| 2024f | 327.1 | 22.9% | $860.3 | 6.2% |
The chart is based on the data provided by C.A.R.’s 2024 California Housing Market Forecast. You can download this Dataset here. We have no clue if this is right, but this is what “They” are telling us!
At BTRE, we believe that if the chart above is right or wrong, does not really matter, because in 10, 15, 20 years, it’s all most likely to be vastly appreciated.
The average home price in California in 2024 is expected to be around $850,000, based on projections from market analysts at the California Association of REALTORS® (CAR). This figure reflects the ongoing demand and limited housing supply in key metropolitan areas such as Los Angeles, San Francisco, and San Diego, where prices are traditionally higher. According to the California Department of Housing and Community Development, housing prices are also influenced by interest rates, which directly affect affordability for homebuyers.
The forecast for the California housing market in 2024 indicates a stabilization of prices, with modest declines in high-cost regions and continued growth in suburban and Inland Empire areas. According to experts like Leslie Appleton-Young, former Chief Economist at CAR, this stabilization is tied to rising mortgage rates, which have cooled the demand slightly, especially among first-time homebuyers.
Mortgage rates, projected to remain around 6%, will make borrowing more expensive, thus reducing overall demand, especially for high-end properties. The Federal Reserve’s monetary policy decisions will continue to influence these rates.
While rent prices may stabilize, significant drops are unlikely due to rising interest rates that prevent would-be homebuyers from entering the market, thereby increasing demand for rental properties. Zillow predicts a slight decrease of 2-3% in some urban areas but notes that rental demand remains strong in suburban regions.
Home prices in California are expected to experience a mild decline of 1-3% in certain regions. However, areas like the Inland Empire and suburban Sacramento may see stable or increasing prices due to their relatively lower costs and influx of remote workers.
The median home price in California in 2023 was approximately $815,000, based on data from the California Association of REALTORS®. This reflects a slight increase from previous years due to sustained demand and continued housing shortage in major metropolitan areas.
The housing inventory in California has remained low, with fewer than 2.5 months’ supply in most regions. A balanced market would have about six months of supply, according to real estate experts like Jordan Levine, Vice President of Economic Research at CAR.
The California housing market remains competitive, with high demand persisting, particularly in urban centers. However, increasing mortgage rates have begun to temper some of this demand. Redfin reports that homes in California are staying on the market longer than in previous years, a sign of the cooling market.
Inflation and higher interest rates are reducing buyer affordability, forcing many potential homeowners to continue renting or delay purchases. At the same time, high construction costs prevent significant additions to the housing supply, worsening the affordability crisis.
Yes, home prices are likely to experience minor declines in 2024, particularly in regions with over-inflated prices like Silicon Valley and Los Angeles. These areas may see reductions of up to 3%, as predicted by experts from CoreLogic, while Inland areas might remain stable.
The average cost of a house in California in 2024 is estimated to be around $850,000. Prices vary significantly depending on the region, with San Francisco leading the state in high home values, while Inland California offers more affordability.
The California housing market trend shows a shift towards suburbanization, driven by the rise of remote work and the need for more affordable housing. Urban markets are cooling, while suburban and exurban areas see consistent demand.
The real estate forecast for California indicates moderate price growth, particularly in suburban regions. High-cost metropolitan areas may experience modest declines or stabilization as interest rates remain high and construction activity struggles to meet demand.
Zoning laws in California, particularly in cities like San Francisco and Los Angeles, heavily restrict new housing development. Experts like Jenny Schuetz of the Brookings Institution argue that more relaxed zoning laws are necessary to alleviate the state’s housing shortage.
The housing market outlook for 2024 shows more stability than 2023, with price declines expected in key urban areas. However, remote work will continue driving demand for suburban housing, creating growth opportunities in places like Riverside and Sacramento. Economists like Mark Zandi from Moody’s Analytics predict that the market will adjust to rising mortgage rates, keeping prices from falling too dramatically.
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