(NEXSTAR) – Low interest rates and a minuscule pool of available house listings have pushed California’s median home price above $800,000 for the first time, putting homes out of reach for many and creating quite a nest egg for homeowners who timed the market just right.
According to The California Association of Realtors, April home sales increased 65% from a year ago, with 458,170 believed to have changed hands.
“California continues to experience one of the hottest housing markets as homes sell at the fastest pace ever, with the share of homes sold above asking price, the price per square foot and the sales-to-list price all at record highs,” said Dave Walsh, California Association of Realtors President Dave Walsh.
According to California Association of Realtors data, the state’s median sale price dipped to just under $250,000 in early 2009, following the Great Recession. Buyers who struck the right deal a little over a decade ago may now be seeing their investment more than triple in value. The median price in April was $813,980.
While the latest surge in prices may be welcomed by existing homeowners, the prices put the American Dream out of reach for many Californians.
“Not only do skyrocketing home prices threaten already-low homeownership levels and make it harder for those who don’t already have a home to purchase one, it also brings to question the sustainability of this market cycle,” Jordan Levine, the association’s vice president and chief economist, said in the statement.
The affordability crisis is perhaps most pronounced in the San Francisco Bay Area, where the median price jumped from just under $1 million a year ago to $1.32 million in April. Four counties in that region had a median price over $1.5M this spring.
California’s Central Coast is the second most expensive region, with the median home selling for $925,000 in April, according to the Association’s data.
There may not be much help coming in the way of new construction. The Associated Press reports that new Commerce Department numbers show construction dropped 9.5% nationwide in April.
Realtors say California’s emergence from the pandemic could alleviate some of the inventory pressure and help stabilize the market.
“As vaccination rates increase and the state reopens fully, higher home prices will hopefully entice prospective sellers who have held off putting their homes on the market during the pandemic to feel more comfortable listing their homes for sale, which would alleviate pressure on home prices,” said Levine.