California’s Median Home Price Increases
- Jesamine D.
As a real estate agent in Los Angeles, servicing the market during COVID has been one of the busiest and exciting times to work in. The last time the market has seen a wave of investment opportunity was back in 2007-2008, the Great Recession. While there were no face masks or shortage of toilet paper then, the economy, both then and now, have experienced dramatic ups and downs.
In a recent study by the California Association of Realtors, new August 2020 data shows a significant recovery in the California real estate market. This is amidst the COVID depression earlier in March, when the statewide median home price was $517,020. Even the Federal Reserve Bank lowered interest rates to near zero to help boost the economy, another tactic that was last supplied in 2007.
With a pandemic and economic difficulties, many individuals wonder, “will housing prices in CA drop?” The short answer: not likely. The fact of the matter is California is one of the most popular states to reside in. In 2019, California’s population reached 39.51 million. With 10.4 million individuals in Los Angeles County alone, developers will need to rapidly build more housing to cater to the market.
The Fed’s historical drop in rates has caused California to reach its highest amount of homes sold in more than a decade. In August, 465,400 single family homes were sold, a 6.3 percent increase from July and up 14.6 percent from August 2019. This is after the first two months of COVID, where buyers and sellers were skeptical of transacting. With such gorgeous hillsides, beaches, weather and plenty of hungry buyers, it’s no wonder California’s real estate market has continued to flourish - even through a pandemic.
While the market has recuperated and will continue to grow, the year-to-date statewide home sales have decreased by 6.8 percent in August. An understandable notion given the slower pace earlier in March-April.
“California’s strong housing recovery in terms of sales and price over the past few months is encouraging as motivated buyers are eager to purchase homes amid the lowest interest rates ever, which led to the fastest sales growth in a decade... however, persistently low housing inventory will continue to push up home prices due to heavy buyer competition, which is starting to outweigh the benefits of record low interest rates and hamper housing affordability.”
- 2020 C.A.R. President Jeanne Radsick, a second-generation REALTOR® from Bakersfield, Calif.
Since California’s rise in the amount of homes sold over the past few months, the median home price has also increased to $706,900, a 6.1 percent increase from July and up 14.5 percent from August 2019. With only one to two months of stagnant activity, it’s safe to say California’s real estate market has bounced back quickly. I mean, who doesn’t love a good deal? Many individuals are taking advantage of historically low rates and investing in their forever homes. Whether you’re looking into a family home, or an investment property, now may be your time to invest.