California Housing Market Shows Positive Trends in February

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Sunny California neighborhood with single-family homes for sale

News Summary

February has brought a significant rebound in California’s housing market, with home sales of existing single-family homes up by 11% compared to January. While the statewide median price saw a slight decline, the increase in active listings and sales indicates a potential shift in market dynamics. The Central Coast and San Francisco Bay Area recorded year-over-year price increases, highlighting regional disparities. Additionally, those seeking affordable options may find respite in the Far North region. Experts expect these trends to continue amidst economic uncertainties.

California Housing Market Bounces Back in February!

Sunny California is buzzing with excitement! February has shown a lovely rebound in the housing market, bringing some cheer after a rocky start to the year. Home sales of existing single-family homes have shot up by a hearty 11% this month, totaling 283,540 homes sold, compared to just 254,110 in January. Such a strong sales increase is the best we’ve seen since October 2022!

But it’s not just a month-to-month comparison that’s got folks smiling. February’s sales show a 2.6% uptick compared to last year, when 276,280 homes were sold in February 2024. It seems buyers are ready to dip their toes back into the housing pool, and they are not alone as more homes become available.

Feeling the Price Pinch?

Now, let’s talk about prices. The statewide median price of an existing single-family home has dipped slightly, down 1.2% to $829,060 from $838,850 in January. Don’t let this discourage you – while prices are still below the statewide average, homeowners and buyers alike will definitely appreciate any break they can get!

Interestingly, despite the increase in sales, California’s home sales have been struggling to stay above 300,000 since 2022. This has created a peculiar situation where, even with a rise in sales, the overall number of pending transactions has dropped for three straight months. Rising mortgage rates and fears of a recession have made some buyers hesitant to make their moves.

Mortgage Rates: A Slight Relief!

Speaking of mortgage rates, they stood at 6.62% for a 30-year fixed mortgage in February – a slight improvement from 6.65% in January. While these rates are still high compared to twelve months ago, those little improvements are giving buyers a glimmer of hope.

Regional Highlights

Diving deeper into this month’s data, we see two of California’s five major regions recording an increase in median home prices year-over-year. The San Francisco Bay Area saw a rise of 3.5%, while the Central Coast became a bit pricier with a 1.6% increase. In contrast, the Far North had a 4.9% decline in home sales compared to last year, and Southern California’s sales dropped by 3%. It’s a mixed bag out there!

Days on Market and Active Listings

Homes are now selling more quickly compared to earlier months. The median time a home sat on the market before selling rose to 26 days, compared to 22 days in January. Interestingly, active home listings have reached a four-month high, showing that there’s an increase in available inventory. This also marks the 13th consecutive month of annual gains in housing supply, which could reduce some of the competitive pressures in the market.

Affordability – Not All Parts Are the Same!

If you’re on the hunt for a more affordable option, you might want to check out the Far North region, where the median sales price for homes is around $386,000. Meanwhile, the Bay Area maintains the title for the highest median sale price at a staggering $1.2 million—a notable increase from $1.1 million just the month before.

What Lies Ahead?

Looking forward, the increase in inventory is expected to ease the competitive environment, providing a little relief to prospective homebuyers. However, economic uncertainties still loom, making it crucial for everyone to keep an eye on these market conditions. Though February was an encouraging month, experts are predicting a sustained improvement through the second and third quarters of 2025—provided those mortgage rates stabilize!

So, California! Whether you’re thinking of buying or just keeping an eye on the housing market, it seems we’re heading into an interesting few months ahead. 🏡