April home sales spring back and the median price reaches a record $900,000

Hope springs eternal. At least for homeowners hoping to sell – and looking for a nice payday.

California’s median home price climbed to a record $904,210 in April, the first time above the $900,000 threshold. The current price is a 5.8% increase compared to March and up 11.4% from a year ago, according to the California Association of Realtors. The Bay Area and Los Angeles had the largest annual price gains of 15.5% and 12.1%, respectively.

The march to a million-dollar median home price has gained significant movement thanks to a larger percentage of higher-end home sales. Homes selling for at least $1 million soared almost 40% in April compared to a year ago, while sales of those below $500,000 slid 8%. Then again, good luck finding a home for less than $500,000 in the Bay Area or Southern California (see table, below).



A TALE OF TWO BUYERS – AND MARKETS

Affordability has always been a big challenge for lower-income families looking to purchase, but buying has become significantly more difficult with the fast-rising prices and the rollercoaster-like mortgage rates. Fewer than one of every five households could afford to buy the median-priced home during the first quarter in California. And first-time buyers face the highest hurdles.

Higher-end homebuyers – many who already own a home – are paying cash or putting a huge down payment on homes, eliminating or greatly easing the pain from the highest mortgage rates in a generation.

But for a large majority of Californians, where the average annual household income is about $92,000, buying a home is a huge push. 

Home prices and sales in April compared to a year ago

RegionMedian home price% gain or loss vs. a year agoHome sales vs. a year ago
California$904,210+11.4%+4.4%
Bay Area$1.44 million+15.5%+23.1%
Central Coast$1.08 million+5.6%+26.7%
Central Valley$493,500+6.6%+11.3%
Far North$364,900-5.2%+9.4%
Inland Empire$607,000+7.4%+1.5%
Los Angeles$840,000+13.5%+9.0%
Southern California$880,000+12.1%+8.7%

Source: California Association of Realtors

‘DON’T EXPECT TO SEE A RAPID RECOVERY’

Prices are rising because of the booming demand and a limited supply of homes on the market, with almost half of homes selling above the asking price in April, according to CAR. Bidding wars and multiple offers have returned.

“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,” says CAR senior vice president and chief economist Jordan Levine. “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.”

Perhaps, but home sales remained below the seasonally adjusted annual rate of 300,000 for the 19th straight month. A healthy market – good for buyers and sellers – is about 350,000 homes, housing experts say. 



PRICIEST MARKETS ENJOY LARGEST SALES INCREASES

Statewide home sales totaled an adjusted annual rate of 275,540 in April, a 3% increase compared to March and up 4.4% from a year ago.

Three of the state’s seven regions had annual double-digit sales gains, including 27% on the Central Coast and 23% in the Bay Area, the two priciest markets.

“April’s rebound in both home sales and prices 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,” says CAR president Melanie Barker. “Market fundamentals are showing signs of improvement, and competition is on the rise again.”

Good for home sellers – not home shoppers.