Largest percentage price increase since February 2014
California’s booming housing market continued in January, as home prices and sales soared more than 22% despite a critical shortage of homes listed on the market.
The state had an annualized rate of 484,730 closed escrow sales in January, a 4.9% drop compared to December — but a 22.5% increase from a year ago, the third straight month above 20%, according to the California Association of Realtors.
Home sales in the Bay Area, from Silicon Valley to Wine Country, jumped 31.8% from a year ago, easily the largest in the state. Home sales increased in six of the seven regions in the state, with only the Far North — such as Butte and Shasta counties — declining.
“Despite an economy that’s slow to recover, the momentum from late last year continued into January, driven by strong growth in California’s core housing markets, especially in the San Francisco Bay Area, where the higher-cost areas experienced the most sales growth,” said CAR president Dave Walsh, vice president and manager of the Compass San Jose office.
‘Buyer demand continues to outstrip supply‘
The head-spinning sales growth comes amid a shortage of homes on the market, with active listings falling 53.4% in January compared to a year ago — the eighth straight month of an at least 40% decline.
“With the Covid-19 vaccine continuing to roll out, another fiscal stimulus relief package likely on the way and historically low interest rates, the housing market will continue to thrive,” said Jordan Levine, CAR vice president and chief economist. “The market outlook is stronger than previously projected as buyer demand continues to outstrip supply, but we do expect the current robust market growth to decelerate later this year as the housing shortage intensifies.”
The declining supply coupled with the rising demand are lifting home prices, up 21.7% to $699,890 from a year ago — the sixth straight month of double-digit gains, and the largest price increase since February 2014.
All seven regions reported double-digit price increases compared to a year ago, with the Bay Area leading the way at 20.2%. Five counties in the Bay Area have median-home prices of at least $1 million, with San Francisco leading the way at almost $1.75 million. The Inland Empire — also known as Riverside and San Bernardino Counties, had the second-largest price gain at 18.7%, followed by the Central Coast at 18.6%.
Glenn County was the most affordable market at $247,500, where prices plummeted 21.4%. But the pint-sized county’s home prices are often affected by a decline in sales, which plunged 25% from a year ago.