How’s California’s housing market doing? Are you buying or selling or maybe thinking of investing in real estate in California? Real estate values have mostly recovered and sellers are getting their asking prices but where is California headed and from where? Let’s talk a bit about the California housing market, generally in the San Diego, Los Angeles and San Francisco areas reviewing the real estate markets overall as well as a look at the luxury market.
In the Bay Area, data shows the most recent median home value for San Francisco around $1.1M as of July of this year, which is a 5.4% year-over-year increase. Values have been on a nice ride since early 2012 when the median home value for San Francisco measured at $650,000. That’s nearly a 100% jump in the course of four years. The term “luxury” is a relative term, relative to the median home values for the area.
A luxury home in San Francisco might be in the $3-$4M dollar range where as you get further away from downtown and the outer suburbs, you won’t find very many homes in that range. For example, in 2011, the median home price in Pacific Heights was just over $3.25M while recent data pulled from the Multiple Listing Service reports a median home value of $6M as of July of this year. Whereas in Danville the median home value is just over $1M. The trends for San Francisco real estate indicate a bit of a cooling trend however, as listings are up but inventory is still showing a three month supply, a rather balanced market.
Further south in the Los Angeles area, overall the luxury median home value is just under $3.7M with the overall median home value coming in at $531,500 as of July 2016. This is an 8.5% increase compared to July of last year. From May to August the median sales price was $695,000, according recent data from Trulia. Los Angeles real estate covers a vast area and you will find some rather large differences in values from one community to the next so it’s a bit of a challenge to forecast the Los Angeles market in general. However, there really are no signs the real estate market is headed for any sort of a pullback with inventory Overall, the luxury housing market has been on a nice ride year over year although there has been a slight pullback for the first two quarters of this year. A year ago, the median luxury value was around $3.5M. On the high end of luxury real estate, price appreciation has been leveling off. These are homes in the $10M to $20M dollar range.
A further ride down I-5 takes us to San Diego, we find the luxury home sales started extremely strong with a median home value for luxury homes selling for around $2.3M and after a slight increase in the first quarter, luxury home values as of July were closer to $2.35M. In the general real estate market for all of San Diego County, prices are still on a gradual recovery since 2008 with the median home value just above $490,000 as of July of this year. Inventory is down for the area while at the same time homeownership rates have fallen below 50 percent. This has been a gradual decline since the peak of 63% in 2006. The national homeownership rate was 62.9% as of July, 2016. The area has always had a relatively higher concentration of renters compared to other metropolitan areas. Multifamily construction is also on the rise to meet this rental demand.
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