California home sales finished the year on a “positive note,” climbing to the highest level in five months but remains far from the electronic music dance pace before the pandemic.
Almost 268,200 homes sold in December on a seasonally adjusted rate, a 0.1% bump from November – and up an impressive 19.8% from a year ago, according to the California Association of Realtors. For the year, home sales increased 4.3% to 269,030, the first gain in three years.
But the better-than-expected annual and December home sales comes with a dose of reality – they are compared to a year ago, when sales were more like a polka than even a waltz. For comparison. California home sales often topped a seasonally adjusted 400,000 before the pandemic.
All seven regions enjoyed healthy sales gains in December from a year ago, including a state-leading 20.5% on the Central Coast, from about Santa Cruz to Ventura. But, again, they are compared to paltry sales figures in December 2023.
DEVASTATING SOCAL WILDFIRES WILL AFFECT THE MARKET
And the end-of-the-year cheer will likely fade at least during the first few months of 2025, with higher mortgage rates and the devastating wildfires in Southern California
“With mortgage rates remaining at their highest level since early July and devastating wildfires taking a toll in the Southern California housing market, we’ll likely have a slow start for the year, but demand should pick up once we enter the spring home-buying season,” says CAR president Heather Ozur, a Palm Springs-area Realtor.
California’s annual median-home price increased for the 18th straight month, the latest evidence that consumers are more concerned about finding a house than paying for one despite higher mortgage rates. The December median-home price climbed to $861,020, a 1% increase compared to November – and up 5% from a year ago.
The price gain was largely because of the 28.7% increase in million-dollar homes that sold last month compared to a year ago. Home sales of $500,000 or less dipped 0.4%.
All seven regions posted price increases, with Southern California and Los Angeles leading the way at 7.6% and 7.3%, respectively. The Bay Area remains the priciest at $1.2 million, with San Mateo County leading the way at $1.85 million.
The Far North, from about Chico to Crescent City, remains the most affordable at $369,500.
“As projected both sales and price activity were up modestly in 2024 as California wrapped up the year with a double-digit sales gain over last December,” said CAR chief economist Jordan Levine. “While the housing market is expected to improve further in 2025, stickier-than-expected inflation, the ongoing insurance crisis, and policy changes under the new White House administration are some of the hurdles that could present challenges for the market in the upcoming year.”
Home prices and sales in December compared to a year ago
| Region | Median home price | % gain or loss vs. a year ago | Home sales vs. a year ago |
|---|---|---|---|
| California | $861,020 | +5.0% | +19.8% |
| Bay Area | $1.2 million | +1.5% | +14.6% |
| Central Coast | $995,000 | +1.6% | +20.5% |
| Central Valley | $492,000 | +6.5% | +15.1% |
| Far North | $369,500 | +1.4% | +6.3% |
| Inland Empire | $594,950 | +4.4% | +7.3% |
| Los Angeles | $815,500 | +7.3% | +14.2% |
| Southern California | $850,000 | +7.6% | +16.3% |
Source: California Association of Realtors
