However, home sales still below pre-pandemic levels
California's housing market may be suffering amid the ongoing wildfires, but, according to a report, it wrapped up 2024 with a notable year-end surge, marking its largest annual sales increase since June 2021.
While December's sales showed steady growth, the market remains in a state of flux as it moves into 2025, facing challenges such as high mortgage rates and regional disruptions.
The California Association of Realtors (C.A.R.) reported that home sales ended the year on a positive note, but caution remains as the market navigates ongoing hurdles.
December’s total for existing single-family detached homes sold reached a seasonally adjusted annualized rate of 268,180 units, a 19.8% rise from the same month a year earlier.
However, home sales remained below pre-pandemic levels, with the December figure still significantly lower than the 400,000-unit benchmark seen before COVID-19.
While December’s sales pace showed little change from November’s 267,800 units, the year-over-year jump in sales contributed to a modest improvement for the full year. Existing single-family home sales for 2024 totaled 269,030, a 4.3% increase compared to 2023. The growth in 2024 marked the first year-over-year increase in home sales after three years of decline.
C.A.R. president Heather Ozur said that mortgage rates, which remain at their highest levels since early July, along with challenges like wildfires in Southern California, may lead to a slow start for the market in 2025.
"Demand should pick up once we enter the spring homebuying season," she added.
The statewide median price of existing homes saw a 1.0% monthly increase in December, rising to $861,020 from $852,880 in November. This marked the 18th consecutive month of year-over-year price increases, up 5.0% from the previous December’s median of $819,820.
Though price growth is expected to moderate in the coming months, C.A.R. forecasts continued modest increases in the first quarter of 2025.
The market for higher-priced homes contributed to the price increases, particularly in the $1 million-plus segment, where sales grew by 28.7% year-over-year. Conversely, sales in the under-$500,000 category dipped slightly by 0.4% in December.
C.A.R. senior vice president and chief economist Jordan Levine said that while the housing market is projected to improve further in 2025, factors such as persistent inflation, ongoing insurance issues, and potential policy changes could challenge the market’s recovery.
Homebuyers and sellers are encouraged to watch for further trends in pricing and inventory as the year unfolds.
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What are your thoughts on California's housing market heading into 2025? Share your opinion in the comments.
