The California housing market is making a slow recovery from the COVID-19 fallout as many are fleeing the state for more space inland.However, the number of homes sold in the Golden State reached its highest level in over two and a half years in July, according to the California Association of Realtors and the median home price set a new record.
For the first time since February, July’s existing single-family home sales totaled 437,890 in July, up 28.8% from the month prior and up 6.4% year over year. This is also the first month the state saw an annual gain in home prices in five months.
“A housing market trifecta of strong pent-up demand, record-low interest rates and a renewed interest in the value of homeownership bolstered July’s home sales,” said 2020 CAR President Jeanne Radsick in a statement. “With this year’s delayed start of the homebuying season due to the pandemic, we expect home sales to remain robust in August and September, extending the season later than what’s typical.”
The statewide median home price was $666,320 in July, jumping 9.6% year over year. CAR said that home prices in the Central Coast and San Francisco Bay Area went up more than 10% year over year.
Homes prices below $500,000 made up 40% of all sales in July, while sales of million-dollar properties were 20.4% of the market.
CAR noted that the change in mix of home sales in California was a factor that made the median home price higher – sales of higher-priced properties continued to outpace sales of lower-priced homes.
“Stronger sales of higher-priced properties continue to propel the statewide median home price, as those who tend to purchase more expensive homes are less impacted by the economic recession,” said CAR Senior Vice President and Chief Economist Leslie Appleton-Young in a statement.
“High demand in resort communities is another variable that’s fueling the increase in home prices, as a new wave of remote workers are leaving cities in search of more space and a healthier lifestyle in what used to be the second/vacation home market,” Appleton-Young said.
Additionally, California’s housing inventory had a 48% year-over-year decline, the biggest drop in active listings since January 2013.