Median home sale prices in California more than doubled the national median sale price during 2021.
California Real Estate Prices Increased +12.3% y/y in 2021
According to the California Department of Finance, the median sale price of a single-family home in the Golden State was $798,440 in 2021. The national median sale price of a single-family home in 2021 was $353,900, according to the National Association of REALTORS®.
Prices in California’s relatively more affordable outlying suburbs and smaller metro areas saw home value growth of more than +20%. Sacramento, for example, saw robust demand from buyers seeking larger houses at relatively affordable (do-able) prices. The “typical” price of a single-family family home in Sacramento, according to an estimate by Zillow, was $472,000 in 2021, an increase of +22.3% from 2020.
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Bay Area Prices
The housing market in the Bay Area was considered to be among California’s “coolest” (comparatively less costly) markets price-wise. A “typical” single-family home in San Francisco saw its home value increase to $1.53M in 2021, an increase of “only” +9.3% from November 2020 to November 2021, according to Zillow.
Data from the California Association of Realtors (CAR) indicated that San Francisco home prices increased more than Zillow estimates. CAR noted that the median sale price of a single-family home in San Francisco was $1.9M, an increase of +12% y/y from $1.67M in 2020.
“Even” the East Bay (Oakland, Berkeley and surrounding suburbs) experienced stronger price growth than San Francisco. Daryl Fairweather, chief economist with Redfin, said, “Oakland was the market that saw the biggest increase in demand. Everyone was leaving the city and going across the bridge.”
The median sale price of a single-family home in Alameda County which includes Oakland and Berkeley was $1.3M in November 2021, according to CAR, a jump of +24% y/y from $1.05M. Move-in ready homes with work-from-home spaces often averaged a dozen or more offers.
Los Angeles and Lux Prices
Prices in Los Angeles were not bargains in 2021. According to data from Redfin, the median sale price of a single-family home in Los Angeles was $810,000, an increase of +11% y/y with a combination of larger price increases in more relatively affordable areas than prices in already high-tier areas such as Santa Monica.
Super affluent areas such as Montecito near Santa Barbara experienced soaring price increases. According to Martha J. Mosier, president of Berkshire Hathaway HomeServices California Properties, average sale prices increased +43% y/y to $6.46M. When asked the reason for this giant uptick in luxury prices, Mosier said, “More and more executives no longer have to remain in LA or in San Francisco.
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California Dreamin’ Home Prices in 2022
With inventory levels being pervasively low throughout the Golden State (active listings remain down more than -30%), Danielle Hale, chief economist with Realtor.com, said that California markets are expected to see home prices grow “half as fast as they did in 2021 (and) that should be a relief do buyers.”
Why a slower pace of price appreciation despite the expected dearth of existing home inventory and the slow pace of new construction? Rising interest rates.
Thanks to The New York Times.