California’s housing market hit a new milestone in April as median home prices neared the one million dollar mark, setting records during the state’s buoyant spring buying season.
The California Association of Realtors (CAR) reported that the median home price in the state soared to $904,210 in April, an 11.4 percent increase compared to last year, solidifying the market’s strength.
Despite daunting price levels and elevated mortgage rates, California’s real estate market continues to demonstrate resilience. However, according to CAR President Melanie Barker, affordability challenges remain in the state where the median household income is $91,551.
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“April’s rebound in both home sales and price shows the resilience of California’s housing market and is a signal that buyers and sellers are beginning to adjust to the higher interest rate environment,” Barker said.
According to CAR’s report, home sales in the state rose slightly last month, with existing single-family home sales totaling 275,540 — a 3% increase from March and a 4.4% rise from April of the previous year.
Sales of homes priced at or above $1 million jumped by 39.8% year-over-year in April, while sales of homes under $500,000 decreased by 8%.
Higher-priced homes now make up more than a third (36.4%) of all sales, the largest proportion in at least five years, according to CAR. This trend has contributed to the overall rise in the statewide median home price, helping drive year-over-year growth at the start of the second quarter.
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According to Zillow’s market heat index, California is in a “strong seller’s market,” indicating that homebuyers have little room for negotiating home prices. CAR Senior Vice President and Chief Economist Jordan Levine said the situation may not change anytime soon.
“While the market performed solidly in April, we don’t expect to see a rapid recovery as long as inflation remains sticky and mortgage rates continue to fluctuate despite recent dips,” Levine said. “However, housing inventory has also started to increase, which will provide much-needed supply to the market and facilitate a higher level of home sales in the second half of the year.”
Regionally, the CAR noted that median house prices increased in every major California metro area except one compared to a year ago.
According to Zillow, the San Francisco Bay Area, with a market heat index score of 111, saw the highest surge in median home prices, soaring by 15.5% compared to the previous year.
Similarly, Southern California saw an increase of 12.1%, driven by market activity in major urban centers. CAR noted that these two regions were the standout performers, with double-digit growth in median prices.
In contrast, the Central Valley and the Central Coast saw more moderate increases, with prices rising by 6.6% and 5.6%, respectively.
The Far North region was the only one in California to see a downturn, with a 5.2% decline in median home prices.
With the California market running as hot as it currently is, there is little hope for broad-based relief.
“Market fundamentals are showing signs of improvement, and competition is on the rise again; homes are selling faster and nearly half the share of homes is selling above asking price — the highest in nine months,” Barker said.
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This article California Median Home Prices Near $1 Million For The First Time originally appeared on Benzinga.com
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