After four consecutive months of year-over-year inventory increases, California is now solidly a buyer’s market, which means the supply of homes is greater than the demand for properties in the state.
That is happening in part because, as real estate analyst Nick Gerli put it, “no one is buying homes in California.” Home sales in the Golden State are hovering just below the lows of the Great Recession, according to a recent report by Realtor.com, as sky-high prices and elevated mortgage rates keep buyers on the sidelines of the market.
Why It Matters
The California housing market experienced great changes during the pandemic, when the rise of remote work allowed many homeowners to relocate from metropolises—such as San Francisco and Los Angeles—to smaller nearby towns or leave the state entirely. While the state saw a slight dip in home prices in early to mid-2020 compared to a year earlier, home prices quickly rebounded and have continued rising steadily until now.
Historically high home prices are now playing a crucial role in keeping demand low in the state, together with mortgage rates still hovering just below the 7 percent mark and growing economic uncertainty linked to the effects of President Donald Trump’s tariffs.
What To Know
According to data from Realtor.com, there were 73,160 active listings in California in May, the highest number since October 2019—before the pandemic homebuying frenzy further shrunk supply in the state…