Big Town Real Estate

Big Town Real Estate

California Real Estate Market: Housing, Trend, Forecasts, Summary, 2024

California Real Estate Market

Where is the California real estate market headed? What lies ahead for the California real estate market and owners of California Real Estate? This is always the “million dollar” question
(or multi million dollar question often times) – is a seller’s market? Buyers market? Is inventory going to increase when rates decrease? Countless articles attempt to explain where the market is headed and what it is doing. While nobody knows exactly the answer to this, one thing we do know is: The median price of homes for sale in the golden state saw a sharp increase, when rates were at historic lows (to be expected), and has started to drag somewhat, now that rates skyrocketed faster than they ever have in recent history.  Moreover, the current listings reflect a tightening supply, making it a competitive field for buyers.

California Housing Market Forecast Data: What the “experts” are saying.

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:

YearSFH Resales (000s)% ChangeMedian Price ($000s)% Change
2017424.91.7%$537.97.1%
2018402.6-5.2%$569.55.9%
2019398-1.2%$592.44.0%
2020411.93.5%$659.411.3%
2021444.57.9%$786.819.3%
2022342-23.1%$822.34.5%
2023p266.2-22.2%$810.0-1.5%
2024f327.122.9%$860.36.2%

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.*

Real Estate Market for Counties in California

Exemplifying this trend are the counties of Los Angeles, Orange, and San Diego, forming hotspots in the housing market of the state. Both cities are known for their high standard of living and attract a broad spectrum of buyers, thus pushing up local estate prices by a significant percent. These are some of the biggest appreciation markets in the Nation, and make up the basis of our Bigtown Core Four Strategy.

We will address particulars below, but at the end of the day, The California Association of Realtors predicts a rebound in 2024, with prices to go up by 6.2%. We do not know if this is true, but we at BTRE ultimately believe that it does not matter if this is true or not, because real estate appreciates over the long run regardless- and we subscribe to Warren Buffet’s idea that “timing the market” is not the road to wealth, but “time in the market” is. 

Regardless of what the market has done in any given year- we need to zoom our perspectives out  and realize that, people that bought real estate 25 years ago are loving it, and people who always thought about it but never did, are kicking themselves. This is an important “zoomed out” perspective, that we should maintain when thinking about “what is the market going to do next year.”

Everything in this article, and indeed everything in every “Prediction” written by any “guru” about “What will happen to real estate in the future in Southern California” – should be viewed with the following in mind:

In LA County, year 2000, Median home price was $221,000; In April 2024, the price is $825,970 (Gone up almost 4x, including the “big crash” of ‘08 or “The great recession” as some call it)

In Orange County, year 2000, Median home price was $322,046, and in April 2024, the median home price is $1,400,000.00 (!!!) [Gone up over 4x, including the “big crash” years).

Thus, regardless if real estate goes up or down in ‘24 or ‘25 – in the long run – real estate in So Cal always goes up. Of course, we would prefer not to operate on an infinite timeline, because while the real estate timeline may be infinite infinite, we humans have finite timeflines. So let’s look at the particulars.*

Will the Housing Market Crash in California in 2024? Or 2025?

The  question of whether the housing market California will crash in the upcoming year is one that has come under intense scrutiny, especially considering the current real estate market trends of skyrocketing interest rates.  The focal point is Southern California- an area that may experience the most significant impact due to its sky-high median home prices. These prices have additional implications on affordability, effectively posing a seemingly insurmountable obstacle for many potential buyers.

Moreover, the surging median sale price is not just limited to Southern California. Counties such as Santa Clara, home to the tech-driven Silicon Valley and bustling city of San Jose, have experienced similar trends. Buyer demand in these areas is historically high, but the relentless growth of real estate prices and mortgage rates has raised questions about the sustainability of such a market. The most recent news about the housing market reflects the consumer’s call for affordable housing, pressing the real estate industry to consider the financial strain on potential buyers. Without a shift towards increased housing affordability, the question of a market crash in the near future, many believe, is not a question of ‘if’, but ‘when’.

On the other hand, as we “zoom out” our perspective- we should remember that,  even if a consumer buys a house RIGHT BEFORE a market correction- over the long run, that person will  still come out ahead, over time. (It might be a wild ride in the meantime though)*

What are the California Real Estate Market Trends?

California Real Estate median house price trends

As of the date of this article, the California real estate market is a bit tepid; there is a significant percent decrease in active listings, especially in major cities. Santa Cruz and Santa Barbara, for instance, experienced a discernable percent drop in single-family home sales, partly due to the issue related to exorbitant average prices and exacerbating unemployment rates. The monthly payment has become a daunting task for many residents, as escalating prices make it almost insurmountable for potential buyers.

However, inventory remains tight, so such a seemingly difficult climate for housing that one would expect would result in declining home prices- has not resulted in major declines. Simple supply and demand economics dictates that, even if demand goes down due to people not being able to afford goods, if the supply of goods shrinks along with the demand, the prices will be more or less stable. Sellers offering their properties for sale are at historic lows, since many of them are “locked in” to 2-3% mortgage rates–and so, supply of housing is at an extreme low point.  This keeps prices up, even when mortgages are becoming less and less affordable, a factor which would usually result in demand (and therefore prices) coming down.

On the other hand, the relief for buyers may be in sight as mortgage interest rates have somewhat stabilized, and the fed has stated that there will be rate drops- so this should increase buyers buying power and increase demand, and the “pent up buyers” who have been waiting in the wings will all come out, and push prices EVEN HIGHER! .

But on the other other hand- what happens when the “pent up sellers” start selling their properties? The “locked in” sellers will finally sell someday- or so goes the common wisdom- and if and when they do, will they dump a massive supply of houses on the market, and therefore push prices down? Or will the pent-up-buyers and pent-up-sellers cancel each other out, and result in a market that is more or less flat and consistent?

This is a quandary, to be sure, and can be interpreted many different ways. But again, at BTRE we believe that we should zoom out, and not necessarily  think of “what is happening in 2024” but “why is buying real estate a good idea in the long run”? As Warren Buffet says, it’s not “timing the market” but “Time in the market” which we believe results in building real wealth.

At the end of the day, regardless of what the market has done in any given year- people that bought real estate 25 years ago are loving it- and people who always thought about it but never did- are kicking themselves. This is an important “zoomed out” perspective, that we always need to maintain when thinking about “what is the market going to do next year.”

Will the California Real Estate Market prices go up in 2024?

The CAR does indeed forecast an increase in home prices in 2024, as shown above,  with existing single-family home sales expected to increase by 22.9% and the median home price projected to rise by 6.2%. Additionally, Comerica forecasts that national house prices will rise by 2.9% in 2024. While some cities in Northern California are forecasted to see a drop in home prices, the overall outlook for the state’s housing market is optimistic, according to C.A.R.  Based on this forecast, 2024 in California appears optimistic.

What are the California Real Estate Market Forecasts for 2024?

California Real Estate Market Forecasts for single family homes

As stated above- the “experts” think that the California real estate market is going  to experience a positive rebound in 2024. The California Association of Realtors (C.A.R.) predicts a 6.2% increase in the median home price to $860,300, following a 1.5% decrease in 2023. This real estate market forecast also estimates a total of 327,100 units in single-family home sales for 2024, showing a promising rise from the projected 266,200 units in 2023 according to Gord Collins of ManageCasa. The market is expected to maintain its upward momentum, with a mid- to single-digit, year-over-year growth rate in California’s median price for the early part of 2024. The forecast is optimistic, attributing the rebound to a decrease in mortgage rates, which is expected to lead to increased housing demand and further upward pressure on home prices. While there are challenges such as ongoing inventory constraints and housing shortages, the overall outlook for the California real estate market in 2024 is positive

What is the California Real Estate Market Summary to date?

The California Real Estate Market has been the focal point of yearly meetings, with both state and county governments seeking solutions to ongoing housing affordability challenges. A core issue revolves around the supply of homes, particularly at the county level. According to various 1-page articles that encapsulate market trends succinctly, the supply of homes has been dramatically lower than demand, an imbalance that has led to skyrocketing prices and strained affordability.

What are the California Real Estate Market Statistics for 2024?

Statistics for 2024 are sparse, due to how early it is in the year (at the time this article is written). The overall optimistic attitude seems to be continuing, according to Dana Anderson of Redfin. She recently came out with an article that shows an increase in home tours during January 2024, “even though demand has picked up some, I’m not wowed”. Dana Anderson appear to believe the market will take off in a traditional way, with springtime being the start of busy season, with rates going down concurrently, thus resulting in a busy selling season, which would likely result in at least a modest increase in real estate prices (and certainly not a crash or major correction). 

While nobody really knows what is coming for sure, the consensus appears to be that a major correction or crash is unlikely.*

What are the latest insights into the California property market?

Current shifts in the California property market indicate a burgeoning interest in niche markets such as the leasing business within the San Diego-Chula Vista-Carlsbad area. This growth is coupled with the amplified professional goals of individuals in real estate, prioritizing Pre-License Training to ensure proper interpretation of the legal developments. Legal Resources have become imperatively important, notably for those practicing in Transaction Rescue. The market has also witnessed a surge in the participation of public interest organizations in legislative advocacy, ensuring the robustness and the ethical nature of the industry by promoting professional standards.

The economic outlook of regions like the Inland Empire is also an interesting study in the context of California real estate. More people have moved to more remote locations due to the ability for remote work, pushing up prices in markets that previously had not experienced such influxes of people. (Places like Joshua Tree, Crestline/Arrowhead, Redlands and other inland empire areas) 

The current climate reinforces the need for nuanced understanding of local markets, and increasingly, there is no large general “real estate market” , there is “this market” and “That market” . Thus, it is important for consumers to have someone on their team familiar with the locale in which they desire to invest. 

What is the outlook for the California real estate market?

As we look to the future, we can only judge by the past. In the Southern California market, prices have consistently gone up over time, and even when there are corrections, and yes, even CRASHES such as 2008– it would seems a safe assumption that over time, the Southern California Real Estate market will continue to thrive, and continue to be the foundation upon which fortunes are built.

For those considering stepping into this competitive market, there is a multitude of assistance on transactions that can make the journey less daunting. Your licensed agents at BTRE can help you along this tortuous road, and ultimately, usher you towards the destination of real estate ownership, and ultimately, wealth creation.

*: Big Town Real Estate makes no representations or warranties regarding the future of real estate and nothing herein should be construed as investment advice or should be relied upon in any way. Any investment, real estate included, can lose money over any given timeframe. Licensed and experienced investment professionals should always be consulted before acting on any investment strategy, and due diligence should be performed on any and all investment deals.

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