(AP) — Heated market conditions and a shortage of homes for sale continued to put upward pressure on home prices in California, driving the state’s median price above the $800,000 benchmark for the first time ever in April, as home sales soared from last year’s pandemic-level lows, the California Association of Realtors said Monday.
Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 458,170 in April, according to information collected by C.A.R. from more than 90 local Realtor associations and multiple listing services statewide. The statewide annualized sales figure represents what would be the total number of homes sold during 2021 if sales maintained the April pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
April home sales increased on a monthly basis for the third consecutive month, rising 2.6% from 446,410 in in March and up 65.1% from a year ago, when 277,440 homes were sold on an annualized basis. The sharp yearly sales jump was expected as the housing market was hit hard by the pandemic shutdown last year, when home sales dropped more than 30% over the previous April.
“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, while active listings remain at historic lows,” said C.A.R. President Dave Walsh, vice president and manager of the Compass San Jose office.
“The high demand and shortage of homes for sale, driven by these market factors, continued to drive up home prices and shatter the record-high set just last month.”
California’s median home price broke last month’s record and set another new record high in April as the statewide median price surged more than 34% from a year ago. The statewide median home price climbed 7.2% on a month-to-month basis to $813,980 in April, up from March’s $758,990 and up 34.2% from the $606,410 recorded last April. The year-over-year price gain was the highest ever recorded, and it was the first time since June 2013 that the state recorded an annual increase of over 30%.
“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,” said C.A.R. Vice President and Chief Economist Jordan Levine. “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.”
Other key points from C.A.R.’s April 2021 resale housing report include:
At the regional level, all major regions saw sharp sales gains in April, with each region growing more than 38% from last year. The San Francisco Bay Area had the highest year-over-year increase of 101.4%, with five of its nine counties growing by triple digits from a year ago.
The Central Coast came in second with an increase of 81.7%, followed by Southern California (65.5%), the Central Valley (39.8%), and the Far North (38.8%).
Nearly all counties — 49 of 51 — tracked by C.A.R. recorded a year-over-year sales increase in April, with 31 counties increasing more than 50% from a year ago and 11 counties growing by triple digits. Six of the counties with a growth rate of over 100% year-over-year had a median price above $1 million in April 2021.
Mono had the sharpest gain of 233.3% from last year, followed by San Francisco (165.7%), and Marin (139.3%). Counties with an increase from last year had an averaged gain of 70.7% in April, compared to 32.9% in March.
Sutter (-6.3%) and Del Norte (-4.3%) were the only counties with a sales decline from last year. Sales growth remained concentrated in higher-priced markets, while home sales in the lower-end continued to be lackluster.
The million-dollar segment increased in demand by more than 200% year-over-year, with sales of homes priced $2 million and higher surging over 300% from a year ago. Sales of properties priced below $300k, on the other hand, continued to fall precipitously, with the year-over-year growth rate dropping 34% in April. Tight housing supply continues to be the primary constraining factor for sales in the lower price segment.
New record median prices were set in all major regions in April, with each region growing more than 20% from last year. The Central Coast region continued to have the highest year-over-year gain of 40.8%, followed by the San Francisco Bay Area (35.6%), Southern California (28.6%), the Central Valley (25.5%) and the Far North (22.8%). All 51 counties tracked by C.A.R. reported a gain in median price on a year-over-year basis, with 48 of them increasing more than 10%.
San Mateo County became the first county to smash the $2 million price point in April. Santa Barbara had the largest price growth of 83.3% in April, followed by Tehama (66.4%) and Plumas (58.4%).
Twenty-nine counties set a new record-high median price in April. Mariposa had the smallest price growth of all counties with a 4.0% increase from April 2020, followed by San Francisco (5.9%), and Glenn (7.3%).
The Unsold Inventory Index dropped to 1.6 months in April from 1.7 months in March and was down sharply from a year ago, when there was 3.4 months of housing inventory. The index indicates the number of months it would take to sell the supply of homes on the market at the current rate of sales.
Active listings continue to fall more than 50% in April from last year, recording four straight months that housing supply was cut in half from a year ago. The ongoing decline in inventory is due partly to the surge in demand in the past 10 months, but the lack of new listings is also a contributing factor.
While new active listings did experience a robust year-over-year growth from last April due to the pandemic shutdown, the level of newly added supply is still significantly below the pre-pandemic level. On a month-to-month basis, for-sale properties inched up by 7.4% in April and should climb further in the coming months if the market follows its typical seasonal pattern.
All but one of the 51 counties tracked by C.A.R. experienced a decline in active listings from last April, with 34 of them dropping 50% or more from a year ago. Yolo had the biggest dip with active listings plunging 71.4% year-over-year, while Yuba came in at a close second with a 71.3% decline from a year ago. San Francisco (22.7%) was the only county in California with an increase in active listings from the prior year.
The median number of days it took to sell a California single-family home hit another record low of 7 days in April, down from 13 days in April 2020.C.A.R.’s statewide sales-price-to-list-price ratio posted a record high in April at 103.3% and was 100% in April 2020.The statewide average price per square foot for an existing single-family home remained elevated. At $383, April’s price per square foot was an all-time high. The price per square foot was $284 in April a year ago.
The 30-year, fixed-mortgage interest rate averaged 3.06% in April, down from 3.31% in April 2020, according to Freddie Mac. The five-year, adjustable mortgage interest rate was an average of 2.81%, compared to 3.31% in April 2020.
Note: The County MLS median price and sales data in the tables are generated from a survey of more than 90 associations of Realtors throughout the state and represent statistics of existing single-family detached homes only. County sales data are not adjusted to account for seasonal factors that can influence home sales. Movements in sales prices should not be interpreted as changes in the cost of a standard home. The median price is where half sold for more and half sold for less; medians are more typical than average prices, which are skewed by a relatively small share of transactions at either the lower end or the upper end. Median prices can be influenced by changes in cost, as well as changes in the characteristics and the size of homes sold. The change in median prices should not be construed as actual price changes in specific homes.
Sales-to-list-price ratio is an indicator that reflects the negotiation power of home buyers and home sellers under current market conditions. The ratio is calculated by dividing the final sales price of a property by its last list price and is expressed as a percentage. A sales-to-list ratio with 100% or above suggests that the property sold for more than the list price, and a ratio below 100% indicates that the price sold below the asking price.
Price per square foot is a measure commonly used by real estate agents and brokers to determine how much a square foot of space a buyer will pay for a property. It is calculated as the sale price of the home divided by the number of finished square feet. C.A.R. currently tracks price-per-square foot statistics for 50 counties.