Market Overview
Price Trends:
- The median home price in California is projected to rise by 6.2% to $860,300 in 2024. This increase follows a slight dip in 2023, attributed to the persistent shortage of housing and competitive market conditions​ (Balog Properties)​​ (Richr)​.
- Homes priced above $1 million now make up 36.6% of all sales, the highest share in recent years, indicating strong demand in the luxury segment​ (Norada Real Estate Investments)​.
Sales Activity:
- Overall home sales in California have experienced regional variations. For instance, the San Francisco Bay Area saw a sales increase of 4.3%, while Southern California saw a slight decrease of 1%​ (Norada Real Estate Investments)​.
- In Southern California, the luxury market remains strong with Orange County leading with a median home price over $1.4 million, reflecting a 13% year-over-year increase​ (Norada Real Estate Investments)​.
Supply and Demand:
- The supply of homes remains below the norm, even though an increase in active listings is expected as interest rates fall later in 2024​ (Balog Properties)​. This limited supply, combined with strong demand, continues to drive prices up and create competitive bidding environments, especially in high-end markets​ (Balog Properties)​​ (Redfin)​.
Mortgage Rates:
- Mortgage rates are expected to decline to around 6.0% by the end of 2024, down from 6.7% in 2023. This decline is likely to boost buyer activity and ease some of the financial burdens associated with high property prices​ (Balog Properties)​.
Regional Breakdown
Southern California:
- Orange County: Median prices have grown robustly by 13% year-over-year, despite a slight dip in sales activity compared to the previous month​ (Norada Real Estate Investments)​.
- Los Angeles County: Prices increased by about 9% year-over-year, with a slight month-over-month dip in sales activity​ (Norada Real Estate Investments)​.
- San Diego County: Median prices reached $1.025 million, with a stable sales activity reflecting a slight decrease of 6.2% year-over-year​ (Norada Real Estate Investments)​.
- Ventura County: Experienced a slight price decline of 0.1% year-over-year, though sales activity increased modestly by 6.4%​ (Norada Real Estate Investments)​.
Northern California:
- The San Francisco Bay Area continues to show strong performance with an 11.9% increase in median home prices​ (Norada Real Estate Investments)​.
Predictions for 2024
- Price Growth: The overall trend suggests continued price growth in the luxury segment, supported by strong demand and limited supply. The statewide median home price is expected to rise, with regional variations reflecting local market conditions.
- Sales Volume: Sales volume in the luxury market may see fluctuations based on mortgage rate changes and economic factors. However, the general trend points towards stability in high-demand areas.
- Mortgage Rates: The expected decline in mortgage rates to around 6.0% will likely incentivize buyers, contributing to increased market activity and potentially higher sales volumes​ (Balog Properties)​​ (Redfin)​.
- Sustainable Living: There is a growing trend towards eco-friendly and energy-efficient properties, which is expected to shape buyer preferences and investment opportunities in the luxury market​ (Richr)​.
Investment Insights
For Buyers:
- It’s advisable to get pre-approved for mortgages to strengthen bargaining positions and understand budget constraints. Buyers should also consider emerging trends like sustainable living when making investment decisions​ (Balog Properties)​​ (Richr)​.
For Sellers:
- Sellers should focus on presenting their properties in top condition through professional staging and high-quality photography. Pricing strategies should be aligned with current market trends to maximize returns​ (Richr)​.
Overall, the ultra-luxury real estate market in California remains vibrant and competitive, with promising opportunities for both buyers and sellers in 2024.